Basically

Thanks!

A single member business guy setup a plan (Solo) and rolled into the plan old pension money he had from when he worked somewhere else. He is telling me some of the money is Voluntary After Tax contribution money... not Roth deferrals. He took a distribution from the VAT money rolled into the plan. Do you treat VAT distributions the same way you treat Roth distributions?

THANKS! I did end up exploring more and saw that.

My apologies Ms. Baker... I'll keep my posting more professional Thanks Bill.... I'll do that. I went to the DFVC link and this is what it said... Sheesh... I guess I can't do anything right now

I can't believe this happenned! This client is very responsive and always gets to me the annual census, financial info, and once completed the 5500 signed so that we can file quickly. Unfortunately, for 2023 I just didn't hit the file button so the 5500 didn't get filed. 2024 has been filed. They received and sent to me the love letter from the IRS saying that they don't have record of receiveing the 5500 for 2023. So... Can I still do the DFVC? No penalty letter has been received. Is there no way to plead to the IRS to let it go? I can show a long history of better than timely filing I'm going to have to eat this one aren't I. People make mistakes... there was no ill intent... it was just missed. Give a small TPA a break! What's the best way to go about this??

Like a new comp?

Very simple question... Husband and wife cpa business. Both HCEs. When they make the PS contribution do each of them have to receive the same percentage? As long as the 415 limit isn't exceeded can we do that?

I have recently connected to a new financial advisor (sinigle member RIA). This advisor actually has 2 businesses... lets call them Store-Front Advisors (SFA) and Store-Front Investments (SFI). I was just told right now that SFA sponsors a Simple. I already knew SFI sponsored the 401(k). Since the advisor owns both businesses that means it's a control group. My question is... is it possible for this advisor to fund the Simple through SFA and fund the 401(k) through SFI for the same year? If there was only one business I wouild advise that it is not possible to fund both plans. But there are 2 separate businesses (owned by the same person). If so I assume we combine both plan contributions to ensure 415 limits are not exceeded. Thanks for any insight.

Thanks! I have a few FYE plans left from back in the good old days and understand what IRS limits to use when performing contribution calculations. This plan is a farmer which is maybe why they have a business FYE. Since this is a new plan to me, maybe this might be a good time to align the plan to the business' FYE to keep them both in sync? Do the Dec 31, 2024 year then move to a June 30, 2025 PYE with a short year admin? Make sense?

I have never run into this situation where the business has a June FYE and the plan has a calendar PYE. Is this common? Allowed? A nightmare to administer? Thoughts? recommendations? Thanks

Single member plan, no other employees. Just the two 1099-Rs. If the 1099 is filed electronically the deadline is March 31. Any reason I couldn't efile the 1096 and 1099-Rs?

I just learned that the 1099-Rs for a 2024 RMD and plan closing rollover to an IRA were not filed. I created the forms but the 1096 needs to be signed. What are my options? Can I sign the form as a "paid preparer"? Could I apply for a PTIN and file the return?

Thank you all for your help. The adoption agreement indicated "add just enough" opposed to "amend". I also reached out to ftWilliam (Wolters Kluwer now I guess) support who assisted me to ensure I followed what the basic plan document says. They also helped me use the compliance software procedure correctly (I was not clicking one of the checkboxes). All good

Thanks! I will look at the document

I had 3 employees terminate during 2024 in this dentist practice. As a result the 410(b) average benefits percentage test has failed. The solution is to overide the test and add back into the mix one of the terminated employees. Does it matter which employee I override and provide a PS contriution to in order to pass the test? Of course the obvious choice would be the one who earned the least because that the contribution amount would be smaller.

This client has always been a single member business... not worried about losing that status. They are simply looking to make an investment and the application is asking "is this an ERISA plan". I think after googling and reading all different articles and posts I understand that ERISA was created solely to protect plan participants. I see that when you have a single member business with no one to protect, well, those ERISA rules don't apply... aren't necessary. I run/advise Solo plans like plans with employees. I think I just looked at the Solo plan as an easier plan to handle due to not needing to be worried about coverage, non-discriminiation and other necessary requirements that a larger plan must provide/adhere to. I will let them know that the plan is indeed not an ERISA plan. I will add that the plan is a Qualified Retirement Plan as it meets all the IRS requirements. Thanks for your input and help.

This plan is a single member business plan run according to all typical ERISA and DoL requirements. It's a qualified plan using an IRS approved plan document. But technically, is it an ERISA plan? For this new plan investment the sponsor wants to invest in, do they check the box "yes" this is an ERISA plan?

I don't know his personal financial situation. He has $900K in his rollover account. I think he was thinking this was the easiest process... even thought he would be paying 20% in withholding. I will let him know that the rules are what they are and unfortunately there is no getting around the 10% penalty. Appreciate your response.

A client needs to bring his father over to live with him due to his age and health. There is a rollover account with plenty of money in it but the client is only 57. The renovations needed to make the house usable I guess is a lot ($100K+... I didn't ask why so much). There is already a personal loan in place and I don't know if you can call pulling that much out of a plan a hardship. I've looked and there is no exception to the 10% early distribution penalty. Is it as cut and dry as that? There is nothing he can do or say to be spared that added 10% for his noble effort caring for his elderly dad? Roll out some of his rollover account to somewhere and then pull what he needs without an early dist penalty from there? Trying to think outside the box at this point. Thanks

Thanks! This helps. I looked at the plan adoption agreement and found this... For calculating the ERNEC I would not include the 2% insurance premium. I think I should be consistent though... the match should probably also be checked, agreed?

I shouldn't have said "I was told no"... when the client calculated the SH Match they said the medical premium doesn't count as compensation. Their calculation of the SH Match didn't use $319,749.62, only $285K. The adoption agreement says this... The document defines W-2 Compensation as... Which would lead me to say that we do include the S-Corp 2% Medical Premium paid to him. $319,749.62 would be his compensation.

Does this help? Straight off of the W-2. I did include the S-corp 2% medical premium as compensation but I was being told no. If I do then the comp is $285,000 + 34,749.62 = $319,749.62 The SH match would be 4% of 319,749.62 or $12,789.98. They deposited $11,400 and I said they are short $1,389.98. I started second guessing myself.

I have always thought that gross compensation for contribution calculations would be Box 5 of the W-2... Medicare Wages. Med taxes are on your gross wages. Box 1 would be less if a pe-tax deferral was taken, but we want gross wages earned so Box 5 would be the number to use. What box would be used to calculate a SH Match contribution?

The document is a Wolters Kluwer document. I reached out to support and they promptly provided the language in the document that steered me in the right direction. Thanks for the response!

The form doesn't require the claimant to indicate from which money pool the distribution should come from nor did he indicate his desire. The form dose not state a default. As Pam Shoup suggested, I have completed a W-4R form for him to sign. I think I'm good 🙂... yes?