metsfan026

I know that if a Plan qualifies for a Form 5500-EZ, you don't have to file if the assets are less than $250,000. I believe you do have to file a Form 5500 or Form 5500-SF, even if the Plan is less than $250,000 but I just wanted to confirm. The Plan in question covers: 1) A 40% owner 2) The spouse of the 60% owner Reading the EZ directions, I do believe they fall under the 5500-EZ. I'm just trying to cover my bases Thanks in advance!

Thanks! Everyone is eligible to participate, so that shouldn't be an issue either.

It's a school Plan. So there's no ADP Test and there is no matching in the Plan so no discrimination in that regard (it's Employee money only), so is there anything else that would be needed?

Good morning! I just wanted to confirm what, if any, non-discrimination testing is necessary for a 403(b) Plan? Thanks in advance!

I'm getting push back from an employer who doesn't want to allow an in-service distribution for a participant with an outstanding loan, since the distribution will make it so the loan is more than 50% of the current account balance. Is there anything in the regs that would allow it? I know there isn't an issue, I just need something to show the client.

I know based on Secure an employer needs to allow long-term part-time employees to contribute into the 401(k) portion of the Plan. I also know they can keep them out of the discretionary employer contributions. The question that came up is if these participants are required to get the Safe Harbor Match? I believe the answer is yes, but I'm second guessing myself now.

For a Cash Balance Plan, which doesn't have the last day requirement, I know it's irrelevant. If someone went out on leave (whether it's maternity or not) and had already worked over 1,000 hours they are eligible for a contribution. How about a Profit Sharing Plan? We have a plan that has multiple people on Maternity Leave and someone else on Medical Leave. They are all getting paid disability, if it matters. Are they eligible for a contribution for the year?

If someone wanted to freeze a Cash Balance Plan, what is the deadline to do it? Like if they wanted to freeze the Plan for 2025, when do they have to make that decision by? Thanks in advance!

We have a client who terminated their DB Plan as of 12/31/22. The owners were not maxed out and capable of contributing more, if they had the Funds. They simply didn't anticipate the income to continue funding the Plan (it was just the husband & wife). Things have now changed, and they are looking to start a new Plan to begin contributing once again. Is there an issue with starting a new Plan for 2023? I know in total they can't fund more than the maximum between the two Plans. Someone else is telling them that they can't start a new Plan, so I wanted to check as I didn't see the issue as long as it's not over-funded for the lifetime between them. Thanks in advance!

We have a Plan that terminated in '23. There have been some residuals that came in that we are going to allocate to the participants who were paid out as part of the termination. There was a participant who terminated in '22 and had their distribution processed in early '23, prior to the Plan Termination. Would they get their piece of the residuals or no, since they were paid out prior to the termination? Just want to confirm. Thanks!

Sorry, I another question regarding the Form 5500 and filing late. If the client sponsors multiple plans (for instance of DB & DC Plan) and they are late on both plans are the fines separate? Or if it's under the same EIN do they just have to pay one fine for the late filing for all plans sponsored by their EIN? Thanks in advance!

Good afternoon, I hope everyone is well. I'm taking over a client that failed to file last year's Form 5500. What's the process for filing under the Delinquent Filer's program? Is it simply paying the fee and filing the forms through efast checking off "DFVC" program? I just want to make sure I'm not missing a step. Thanks!

We have a terminating Cash Balance Plan that has excess assets compared to the benefits owed. I just want to make sure I'm reading the Plan Document correctly. It is allowed to allocate the overage to the participants, in ratio to their balance at the time of termination? So instead of reverting the money back to the Employer (which would cause taxation), we can pay it all out as long as the document allows? I'm 95% sure, I just want to make sure I'm not crazy

Generally I know Profit Sharing Plans say that someone needs to be employed on the last day of the Plan Year + work 1,000 hours in order to be eligible. What happens if it's a combo plan tested together? 1) Still employed but works less than 1,000 hours - My understanding is that they don't get the Cash Balance Contribution (as per the Plan), but they still get the 7.5% gateway. 2) Worked over 1,000 hours but terminated employment - They still get the Cash Balance Plan, but I don't believe they get the Profit Sharing Am I correct on these two statements? I'm second guessing myself now. Thanks!

I had a client that made a mistake and never filed the 1099-R and 1096 to the IRS (they were sent to the participants timely). Does anyone know what the penalty is for filing them late? I just want to be able to let the client know. Thanks!

- Plan is already Top-Heavy - It's a combo Plan, so we are giving 7.5% to the Non-Highly - No on the Under 21 - There aren't currently not long-term part-timers - 401(k) is already in place with the 21 & 1

Yes

Does anyone know the penalty for a late filing of the 1094/1095? Have a client that messed up and never provided the information. Will be filing with the IRS today, just wanted to let them know what to expect the penalty to be.

I just want to make sure I'm not overthinking this. There's no issue with a Plan design of: Profit Sharing (and Cash Balance) - Immediate Entry 401(k)/Safe Harbor - 21 & 6 mos. Obviously we'd have to pass all testing, and as far as I see there are no complications/issues. They'll just have to make a Profit Sharing contribution for everyone, which will be subject to vesting, but wouldn't need to give Safe Harbor. I'm not overthinking this, right?

It is a partnership. I'm not going to pretend to understand the accounting side of things, but if it's a partnership how is the contribution reported? They still get a tax benefit, correct?

Basically, I'm just trying to explain to the accountant that it's OK to have such a big contribution ($120k) vs. low K-1 income (about $12k). Any guidance on how you've explained it, or anywhere you can point me in the direction of what to show them would be extremely helpful. Thank you!

No, the credit is far less. They want to overfund to the tune of $120k (the minimum was around $75k), so they would only be showing income of $12,000 on their K-1 (since it's reduced by the contributions). The accountant is concerned that showing such a low income, compared to the size of the contribution, is going to be an issue. In the document we set the contribution as a set dollar amount, not a percentage of pay, so from the MRC standpoint it's not dependent on the compensation.

What's the best way to explain why Cash Balance Contributions can exceed the income on a K-1 to an accountant? We have a group who ultimately would show a very small income on their K-1: I believe they are contributing $120k into the Cash Balance, while the total income is $132k The accountant doesn't understand how it's possible and is concerned about a potential audit. We defined the benefit as a set dollar amount, and the maximum deductible is within the $120k. Also, it is a 2 person Plan with both participants being owners. So there is no discrimination testing to worry about. Thanks in advance!

I have a new client coming on that has been doing a simple 401(k) but are now transitioning to a full 401(k) Plan. My question is for startup purposes, when I'm filing a Form 5500 would the start date be now (when it's transitioning to a traditional 401(k)) or would it be the date the Simple 401(k) started? Thanks in advance!

We have a Cash Balance Plan that is terminating in 2024. I believe we still need to complete the Cycle 3 restatement document, since we are already in the window, but I just wanted to confirm. Thanks in advance!