Basically

If I have a plan and the 2 owners and only HCE employees have rollover money in the plan, do I count their rollover balances when determining how top heavy the plan is? I would think not.

Ahh... yes. Goes to show you can be looking at something forever and just overlook a simple mistake. A second set of eyes is worth its weight in gold. I made the change in my SS and indeed I came up with $23,226.56 which is what my client came up with. Thank you both for being my second set of eyes!

A client is paid on a K-1. Her line 14a SE income is 124,961. She and I are coming up with a different result. Here is my work: 142,500 Current year TWB 124,961 K-1 SE Income 115,401.48 1402(a)(12) Deduction (.9235) 7,747.58 FICA (6.2%) paid up to TWB 1,673.32 MED (1.45%) 9,420.90 Total SE Tax 115,540.10 K-1 SE Income - SE Tax 25 Desired Cont % 92,432.08 Adjusted Comp (115,540.10/(25%)+1) 23,108.02 Contribution (25% of Adjust Comp) Calculation Check 92,432.08 Adjusted Compensation 9,420.90 Total SE Taxes 23,108.02 Contribution 124,961.00 K-1 SE Income Am I good?

EZ Eligible ? perfect!

I looked, couldn't find the answer. For a business to be eligible to file an EZ can the business have employees but none of them are eligible due to the hour requirement? Case in point, summer camp where counselors all work less than 1,000 hours. Only husband and wife owners work 1,000+ so only husband and wife are participants. Thanks

I like answers like that. Thanks!

I read another post where I asked about an RMD for a non owner with no attribution. John did ask the above question. Sooo, I'm going with attribution does matter and I'm going to assume the wife is required to take an RMD due to her being an owner through attribution.

I know that a 5% or better owner must take an RMD when they turn 72 even if they are still working. Is a wife also required to take her RMD even if still working? Do attribution rules require her to take an RMD once she becomes RMD age even if she is still working?

Remember, the deferral limit (402g) is a personal limit. Regardless of how many pension plans someone is a participant in the amount they defer into all of them combined can not exceed their personal 402g limit. As BG stated, that same participant can be involved in multiple plans and each employer can make a contribution on their behalf based on compensation earned up to that plan's 415 limit. * don't forget, if one guy has multiple side gigs, you need to consider them all as one gig because of control group rules

Husband is the owner... and he said he is a C corp. Final question... different client but on the same subject.. Let's say a single member business owner earns $25K (a side gig). He's 52 so he is eligible to make a catchup deferral He maxes out his deferrals - 19,500 He wants to max out his ER - 6,250 This adds up to 25,750. Can he categorize the added 750 as "catchup deferral"? Defer 18,750 Catchup defer 750 Total defer 19,500

Got it, thanks. That is the only requirement... each simply must get some of it (and as long as what each one gets doesn't exceed the annual additions limit)

So wife works out like this (assuming she is older than 50): 26,000 deferral + 8,900 ER for a total contribution of 34,900? And this is because the 6,500 catchup doesn't count towards the annual additions. And to get to this the husband forfeits a little ER contribution. And if I'm seeing this correctly, that enables them to defer an extra 6,500 Thanks for the lesson!

When calculating a maximum contribution, the total deferral + ER contribution a participant can receive can not exceed their W2 wages, correct? Case in point - Employee earns $28,400. Max 25% ER would be $7,100. Employee is older than 50 so could defer $26,000 Deferring the 402g limit would result in a $26,600 total contribution (19,500 + 7,100) Adding the catchup... will she be limited to $1,800? Which would get her total contribution up to $28,400? which is her W2 wages? In this case her husband is also an employee and earns $103,090. No problem maxing out there.

Doc says... Required Beginning Date for a Participant other than a More Than 5% Owner - "Later of age 70-1/2 or retirement" So she is good... no need for an RMD. Looking at the document, there is an option that could have been made when setting up the plan... "election of later of age 70-1/2 or retirement" . Is that to mean that what the doc says now shown above does not allow a participant to take an RMD until they retire? Even if they are old enough for an RMD? The "election of" option would be the most flexible option.

No relationship at all the the owner. Still employed and working. As I recall, that is the key.. "still employed". Right?

If a participant in a plan is not an owner, do they have to take an RMD? Wasn't that the way it was in the beginning? Only owners had to take an RMD, non-owners didn't have to take an RMD from a qualified plan? Thanks

No. Come to find out there is rollover money. She can take a dist from that pool, correct? she is 59-1/2

Has the window for a COVID distribution totally closed?

👍 Got cha'

Ohh.. ok. The plan has been liquidated, the 1 employee has been paid out so I will file now. Just to recap: If I file before 12/31/2021 I use the 2020 form 5500-EZ If I file in 2022 I would use the 2021 form 5500-EZ The year end on the form regardless of the form's year would be the day the plan was 100% liquidated, 11/24/2021 (I wouldn't put the year end 12/31/2021) Thanks to all for chiming in. My goal is to understand the proper/correct way to complete what I am sure to many are things that are ingrained. I'm a firm believer that it can't hurt to ask.

Thanks! I am of the mind to file it now before it slips through the cracks. Just for my own knowledge, I would use a 2020 form because the plan would be a short year ending before December 31, 2021?

So what I am gathering is that to do it right I would prepare a form 5500-EZ now using a 2020 form, make the PYE say 11/24 and file it. Sound right?

A client closed down her single member plan and it's final liquidation occurred on 11/23. The balance is $0. My next step is to prepare a final form 5500-EZ. Do I use the 2020 EZ? and change the year end to be 11/23/2021? Just want to do it correctly, cross the T's and dot the I's Thanks

I am reading that to return the IRA distribution that ALL of it must be returned. - If 200,000 is distributed and 40,000 withholding is paid, to return the distribution within 60 days all 200,000 must be returned . Am I mistaken? Can the 160,000 simply be returned reducing the the distribution to 40,000 which ACK points out would result in a possible IRS refund?

I will take a look, thank you!