Basically

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

I completed the online fields, took screen shots and sent it to them. Spelled it out pretty good. I wanted them to see that I am not making anything other than my fee for services on this debacle they created. She will reach out to me if she has problems. Thanks

Back when there was an amnesty program for the Form 5500-EZ a bunch of single member plans came out of the woodwork asking me to prepare the paperwork to take advantage of the free compliance option. A simple process.. no big deal. Before X-mas a client who left me came back telling me the new TPA disappeared and did not file the 2019 or 2020 form 5500s. Simple question.... Paying the $1,500 fee ($750 for each year)... when you complete the online calculator, if you follow it all the way through it takes you to a payment option. Is that the best way to go? There is the option to mail in a check... not advisable? I've done the work and am ready for them to remit the fee. Just looking for opinions

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?

Thankyou. For contributions each entity pays their own share. That is, if Betty earns compensation from her S-Corp then her S-Corp pays the contribution while at the same time Company X pays the contribution for her Company X W2 wages. It makes sense... just crossing my "T"s.

I am really sorry for beating this horse. I am a very visual person. I've attached a quick "schematic" of this situation. The goal is to have a plan for Company X for the employees. If A and B need to be included, so be it. Gotta do it right. If you look at my schematic attached you will see that Betty receives W2 income from X and wants to participate. Dave is just the owner of S-Corp B, no W2 from X. Dave wants to have a plan through his own S-Corp. (sheesh, he may already have one) I am no CPA... S-Corps owning other businesses... above my pay grade how you set that up. I get that each S-Corp will be paid their share of the profits from X via a K-1. Bottom line, they want a plan for X... do we need to include A and B (ASG)? and if so we just count everyone involved as is they were all part of one big company.. correct? Sorry to recap. Just want to put the facts out there.

The partnership has rank and file employees. I have been given the following facts: Partnership has 6 or so rank and file employees One of the S-corp owners also receives W2 wages from the partnership Other partner only receives a K1 from the partnership How does that change the circumstances?

Here is a follow-up question that the client sent to me regarding contribution.... would the contribution for the owners be based on the net income of the partnership? Or on the W2 wages paid out of the S corporations that hold the ownership in the partnership? Contributions are based on compensation... so W2 wages.. right? Damn... and what I understand is that one partner earns W2 wages from the partnership and of course her S-Corp. The other only from his S-Corp. When you have this situation, do you combine W2 income she gets from both places (partnership and S-Corp) to determine her total comp? And contribution wise pro rate it between the 2 businesses? And... if this plan comes to fruition the best option would be to setup the plan as a new comp with everyone in their own group. Best bang for the buck for the owners. THANKS! Always learning.

Allll Righty then! If that is all it takes then an ASG. Question... in an ASG does there not have to be any reciprocal services performed? Can it simply be that the 2 S-corps own company X and that alone will make it an A-org FSO?

Really? I was just reading up on ASG. Is there some kind of grid to complete that helps determine yes or no? Maybe a good clear example? I will ask more questions of the owners but it is my understanding that both S-corps are just owners of X. They do not perform any services for X or draw business from X. All 3 businesses are accounting firms. All stand alone businesses. Thanks for questioning me. I want to give this potential new client the right answer.