Jakyasar

Correct a w-2 employee. W-2 box 1 is 2,200 and box 5 is 27,200, the full 25,000 already reflected as deferral for 2019 so no retroactive deferrals. For Lou S, do you agree with Mike Preston's analysis as well? Thank you both Be safe

Lou S. Following up on this as I was just informed of what they did without me knowing. This calculation always puzzles me: "$19,000 deferral + $6,800 psp = $25,800 < $27,200 100% of pay so you are OK for 415." Does that mean they can now add the 2019 catch up of $6,000 thus bringing the total to $31,800? If not correct, what is the maximum deposit they can have for 2019 between deferral, catchup and profit sharing? Thank you

Hi Is anyone aware if the IRS office in UT open and/or accepting/processing 5500-EZ's? I have a few clients who still file paper copies and I want to have them switch to electronic filings. I do not want the forms sit and not processed for months (hopefully will not be the case but...) Thank you

Thank you for reminding me.

For the DB/CB plans, I do not believe AFTAP certifications are extended, correct? If the 5500 was due 5/15, AFTAP date would be 4/30 but if the 5500 filing is extended to 7/15, I do not see AFTAP being extended to 6/30.

Just saw the notice 2020-23, relating to rev-proc 2018-58 #40. Am I correct to assume that the 4/15/2020 extended line for the 5500/PBGC filing has been extended to 7/15/2020? Thank you

No automatic extension for 5500 Series. ASPPA has requested, but no news yet. This is what I was told

Hi Looking at a 2018 k-1 for a takeover plan (partnership and each partner is making the same amount). I am not sure if I am providing enough information but something does not seem right, at least to me. K-1 line 14 is 125,000 (same as line 1 - ordinary business income) Partner pension deduction is 25,000 Partner employee portion deduction is 1,000 Partner health insurance deduction 15,000 The amount subject to self employment tax was calculated based on 85,000 (125k less 25k less 15k) My approach to calculate the amount subject to self employment tax would be 124,000 (125k less1k - employee portion) What am I missing here? Your comments are appreciated. Thank you

Of course, the longer you wait for the funding, the more you will have to put in

You cannot retroactively freeze a plan. Participants will not accrue a benefit anyway, assuming that the required service provisions for accrual within the plan document are not generous. Do not forget to put in the old and the new formula as well.

I am still going to push the client to file on time. Until I see something in writing, not quite sure want to risk it. There is always DVFC but...

Hi Have a plan that has 4/15/2020 as the extended 5500/PBGC/SSA filing. Unless I missed it, so far there is no extension, is that correct? Thank you and be safe.

In response to Mr. Preston's comment. I was told that the client did it without consulting with anyone and as far as I know did not have a TPA either (the document possibly done thru a broker). Their CPA did not find this out till last week. I am guessing slipped thru the cracks bcz they did not have to file any 5500 forms. Hopefully will put things in order once I take it over. Be safe.

Thank you for the response, will advise them not to do anything for 2020 until they talk to me first and will also have them deposit 20k less. To confirm, these is no way out of the excise tax for 2019, correct?

Hi I never had to deal with the following situation - takeover case: One lifer ps plan. Makes over 280k in w-2. Client makes max PS contribution for 2018 and deposited 10k extra during 2018 and paid the excise penalty. Did the same for 2019 (same as 2019) and now trying find a way not to pay the penalty but going to have to, I do not see any way out of it, am I wrong? Question(s): 10k deposited from 2018, does it apply towards 2019 limit or just becomes an asset of the plan? 10k deposited from 2019, does it apply towards 2020 limit or just becomes an asset of the plan? There is no mistake of fact here. Thank you,

Thank you, now we wait and see what they will come with.

Hi Is the suspension for 2020 RMD applicable only to DC plans and IRA's? I do not see DB/CB plans mentioned. Be safe

Thank you for taking the time and explaining. It is very clear that 25% of individual salaries come into play.

Hello Sponsor has an overfunded DB plan (active and accruing benefits). It is a family business only spouses (owners) and their children (all over age 21). It is a corporation (Sub-S). Sponsor wants a deduction for 2019. As DB is not a viable option for deduction and since no DC plan was input as of 12/31/19, the only option is SEP for 2019. 4 participants with a combined eligible salary of 500k where 25% deduction limit is 125k. As one participant is making 265k, limited to 56k which leaves 69k as additional deductible contribution. The other salaries are 150k 75k 10k Can they each get over 25% of their salaries on a pro-rata basis as long as the total does not exceed 69K? It can be done is a PS plan but not sure how SEP works here. Thank you

Thank you all for your comments/suggestions. I agree with all, the client happens to be a CPA so they will need to make a decision on this. Mr. Rigby, thank you for the reference, will check. Cusefan, plan is not set up yet and hence the question - told them that they cannot have it all. I agree with keeping in the db plan until it terminates but they will still want to transfer all into a PS plan so the problem is inevitably will come up again.

IRA is not an option for them (for whatever reason, not my call). Thought of rehiring the owner but the question now becomes, what is a reasonable pay (I am aware that this is a loaded question but as he is the owner, he can get anything - last paycheck was 7 years ago) and also how many years should he stay employed. Thank you

Hi A DB plan covers the retired owner (a corporation) and also his spouse who is part of the plan as an additional employer (sole-proprietor). Their children are over 21, for 1563 purposes. Retired owner has both DB and rollover assets in the DB plan and wants to transfer the rollover portion into the new PS plan. Eventually they will terminate the DB and will want to rollover all assets into the PS plan, may be this or next year. According to the vendor for the PS plan document, the document does not allow any new participants who are already terminated/retired thus the retired owner cannot transfer his rollover portion from the DB into the new PS plan because he can never be a participant (nor the eligibility provisions allow/have anything on it). According to the vendor, the only way out is to change some language in the document which may take out the document from pre-approved status. Has anyone seen this before and was able to find a solution? Thank you

Revisiting this as I got a bit more and different information from the CPA on this. I was told that the participant is receiving an annuity from the IRA and the amount received satisfied the RMD requirements of all IRA's collectively that he owns. From what I was told, 50% of the annuity was paid directly to the charities and 50% was paid directly to the annuitant (not sure if done monthly or in one lump sum). The annuitant received 1099s for the full amount as taxable distribution. Is this correct? Thank you for your comments

I could not bcz did not know but I found the answer to either scenario, thank you though.

Hi My apologies if this was discussed before. RMD recipient advises their broker to have 15k of the 30k RMD to be provided to charity and 15k to them. But now gets a 1099 for 30k. Can RMD's still be provided to charities? Does it matter if from a pension plan (any type) or IRA? Thank you.