metsfan026

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!

Thanks to both of you? So would they still get a 1099 for the loan default, but the repayment would offset that? I just want to make sure I understand. Thanks!

Question, Plan is terminating and there is a participant who has an existing loan. In my experience they have two options: 1) Pay the loan back in full 2) Default on the loan Someone is asking if they have the option to repay the loan back to their IRA, assuming they are rolling their balance into an IRA. I know what my gut is telling me, but I just wanted to make sure this isn't a viable option. Thanks in advance!

We have someone with an old SEP IRA plan that they are looking to roll the money into a Cash Balance Plan? The value of the SEP is around $1.1 million, just for reference. Thanks in advance!

We re-amortize when someone is on an approved leave of absence. I wasn't sure if a suspension qualified as a leave, or if that had to be handled differently

Question regarding a participant being out on suspension from their job in terms of their loan repayments. The plan states that repayments have to be made through payroll deduction, so obviously if they are out on suspension no repayments will be made. There are two options that I see: 1) Re-amortize the loan to increase the weekly repayments 2) Have the employee makeup the missed payments and leave the schedule the same Is #1 a viable option, or would that not be allowed? I know we can do it if someone is on a leave of absence, but can we do it for a suspension? Thanks!

Thanks, just one of those days where I kept talking myself out of what I knew was right

I think I'm overthinking this, but now I just wanted to be sure. If the Plan is Top Heavy, but no Key Employee received a contribution (they also did not make any deferrals for the year) the Top Heavy is not required correct? Since the highest contribution percentage for a Key Employee is 0%. I just wanted to make sure I was not confusing myself. Just one of those days.

Good morning, I hope all is well. Has the IRS issued final guidance on putting in matching contributions as Roth as of yet? If it's a Safe Harbor Match, does that impact the ability to do it as a Roth? Thanks in advance!

I'll be honest, I don't have much experience in this area but I have someone asking me questions. Someone wants to change their SEP to a Simple IRA. Are there any issues with doing this and can they still contribute to the Simple IRA?

Good afternoon, thank you in advance for your help! I have a two-man plan who has a Cash Balance + Profit Sharing combo Plan. One of the owners if, given the 6% limit into the Profit Sharing for deductibility, does he still have the ability to a mega backdoor Roth. Anyone have any guidance? Thanks in advance!