Basically

Thanks. Appreciate the response.

A client is telling me that the form 5500EZ does not need to be filed this year because their assets have dipped below $250,000 (as of 12/31/2021). Makes me nervous to not file. Do people skip a year if the plan's assets don't exceed $250,000? Or is it recommended/you recommend to the client to keep filing? OR by chance, is an EZ plan required to keep filing once a form was filed (even if assets are less than $250,000 now)?

Thanks. I guess simply removing wouldn't dot any "i's" or cross any "t's". I'll pull out the template I have. Appreciate the responses.

I've done this before but it was not during a restatement year. A small plan (husband, wife, 1 employee), husband and wife are divorcing. Can I simply prepare the Cycle 3 restatement docs and take her off as a trustee? Or does she need to formally acknowledge and agree to no longer be a trustee in amendment form in addition to the restatement? Thanks

Got it.

Sadly I started my pension career in '83, back in the day when we used "PENTABS" for anyone who remembers that system from Santa Barbara CA. Back when there were no message boards... no internet to research and ask questions, just the CCH books with their tracing paper pages (hated pulling out pages and adding replacements when rules/laws changed). I know the answers... it's just reassuring when I ask you fine people and your responses confirm what I already knew. So... cheers to you all! 🍺 To stay on topic... yes Bird... it's all about moving the assets. I told the new financial advisor to use the EIN on file for a seamless move. I'll take a look at that link. Appreciate it.

I have a client I have been working with for many years. He started with a Keogh opened at Paine Webber. In 2007 I restated the plan into my independent doc (ftWilliam). Back when he adopted the plan typically the account was opened using the sponsor's EIN. I have advocated forever that a plan needs it's own EIN. I obtained one (sadly I can not find the paperwork that assigned an EIN for the plan). Now, the client is switching financial advisors. The funds are going to be transferred "trustee-to-trustee" to the new financial institution. I provided the EIN I had in my records only to find out that the existing financial institution has a different EIN and so the funds would not transfer because the EINs are different. I understand that. Here's my question... the existing financial institution produced an EIN assignment (a copy of the SS-4). It goes back to 2006. The client has never taken a distribution and as you know the EIN on the 5500 is the sponsor's EIN. - Is this original EIN defunct at this point ? I mean, after so long with no activity don't they die? - or, should we use it for the transfer because his existing accounts are registered with it? I think that's enough info.

I do like the instant confirmation filing the SF electronically (for my traditional plans). I guess it's time to move towards electronically filing the EZ. Thanks

Does everyone file EZs electronically now? I just spoke to him and will file electronically.

For himself... not for his clients. If HE for his own business (or personally across all his businesses?) was required to file 250+ returns then yes, he needs to file electronically. But because he prepares returns for his clients this rule does not apply. Right?

Prove me wrong.... A CPA I work with prepares his own 5500-EZ. He is telling me that he must file the EZ electronically because he files more than 250 returns. Per the EZ instructions he is reading this: Mandatory electronic filing. A filer must file the Form 5500-EZ electronically using the EFAST2 Filing System instead of filing a paper Form 5500-EZ with the IRS if the filer is required to file at least 250 returns of any type with the IRS, including information returns (for example, Forms W-2 and Forms 1099), income tax returns, employment tax returns, and excise tax returns, during the calendar year that includes the first day of the applicable plan year. While he may file in excess of 250 returns on behalf of his clients, it is my contention that what is written he is interpreting incorrectly. Is what the IRS is saying the following... that if the plan sponsor files in excess of 250 returns on behalf of them self then sure, they must file the EZ electronically. But because he files on behalf of his clients that is not the case, don't need to file his EZ electronically. I am happy to file the EZ electronically to sooth his anxiety. I just don't think it's necessary.

perfect, thank you.

I have read: (1) that a younger beneficiary of a deceased plan participant is entitled to take a lump sum distribution and not be subject to the 10% premature distribution tax because the deceased participant was older than 59-1/2. (2) But then I also read that "the lump sum you receive will be subject to local, state and federal income tax. However, you will not have to pay the 10% early withdrawal tax even if you and/or the deceased person are under 59 ½" That seems fair to me, but then I don't decide what is fair. Is #2 correct? And on the side, the spouse of the beneficiary has no bearing at all on any tax matters.

Zeller, I am using the ftWilliam doc, so I gather I can open the vesting section and place Suzie Doe in there and say that she is 100% vested upon her termination and that will fly? david rigby, I will for sure get it done prior to her being paid out. Thanks

This small CPA firm has 6 employees. A receptionist is leaving and is 80% vested at best. The owner wants her to receive her full account balance. The 2/20 TH vesting leaves her just short. I suggested with the Cycle 3 restatement requirement change to a 3 year cliff which would also be TH compliant. He want's to just give her the full account balance (her money is segregated, all segregated investment accounts). He asked me "what if we call it a mistake, we paid her out everything by mistake, what harm would there be?" I said it would be an operational failure, you didn't follow the document as it stands. Would the IRS come down on them if by chance there is an audit? He wants to just do it.

Appreciate all the responses, thanks for your help!

I agree rocknrolls2. For 2021 the beneficiary does not need to take an RMD For 2022 the beneficiary will need to take an RMD based on the 2021 balance. So, the beneficiary will need to take the 2022 RMD PRIOR to taking a full distribution of his inheritance... correct?

Penchecks... setup the distribution, have the money sent to them and you are done.

Ok, so because she is old enough to need an RMD and because she died that is what triggers the required RMD.

Mr. Bagwell, that is what I have been told. 2021 becomes the beginning date, must take the RMD by 4/1/2022 C.B. Zeller, the beneficiary is the spouse. It is my understanding that there is an exception to the 10 year rule. He can roll it all into an IRA and simply take normal RMDs (no 10 year rule). You are also correct, they have not/did not taken the RMD by 4/1/22. This is a CPA asking me what I know, this is not my client. They will deal with late penalties. I am assuming the spouse beneficiary will need to take an RMD (for 2022) prior to rolling it all over to his IRA, correct? And use the table for beneficiaries, not the uniform life?

Never terminated, just died December 2021. (12/22/21 I'm told) Because she died would she be considered terminated as of her date of death? and as such be required to take a 2021 RMD based on her 2020 year end balance? I can see the beneficiary being required to take a 2022 RMD based on her 2021 balance.

So an employee who was never required to take an RMD, if they die then the RMD requirement will kick in? The beneficiary will be required to take it until the funds are distributed? If so, when? Beginning the following year? The year they died? This participant died in December 2021. Appreciate your help.

I have never heard of this situation. A full time employee old enough to need an RMD but not required to take one because she isn't an owner (just an employee) died in December 2021. Technically she wasn't employed as of her date of death. That wouldn't kick in that she needed to take an RMD for 2021 based on her 2020 balance, would it? Maybe the short question to ask is, do deceased plan participants (who have not been paid out yet) need to take RMDs? I guess technically they still aren't owners so no? I just read that "once a participant starts taking an RMD they must continue taking one, even after death". The twist is that this participant was never required to take one due to the fact that they were an employee and not an owner. Would that mean that her account is not required to distribute an RMD for 2021 because she was just an employee? Am I answering my own question?

Let me clarify my situation... Dr. Bob was 75+ He died late December 2021 - Dr. Bob must take an RMD for 2021 dead or alive... got it. Dr. Bob (dead) Still has a plan balance in 2022 - I am assuming Dr. Bob does not need to take an RMD for 2022... right? - Dr. Bob's wife (sole beneficiary)... must she take a 2022 RMD from the plan? (She has already rolled it over to her IRA) - and if so we would use Table I (Single Life Expectancy) (For Use by Beneficiaries)... yes?

Follow-up.... The surviving spouse and sole beneficiary must take an RMD for 2022. What table would I use? This single life for use by beneficiaries? 2021 Publication 590-B.pdf