Basically

If none of the NHC employees defer does that mean that none of the HC employees can defer? Are they up the creak? 2 x 0% is 0% Background... Small plan of just HCE participants (no other employees at all). Times are tight.. may only make deferral contribution for 2009. One new employee (bookkeeper) who will be eligible. What is she doesnt defer? Suggested options? Doing 2009 planning.

EXCELLENT!! Thanks! Great news ... eluding a very expensive task... so I am told.

So as long as I fluctuate between 80 and 120 participants.... dont exceed 120 then I am good to go with only filihg a schedule I... right? There is not catch like I have to drop down below 100 participants every 3 years of so... just dont exceed 120. AND, I can exceed 100 but less than 120 for many years in a row... Right? Sorry, want to simply have it spelled out. Thanks

If I have a new plan.. for 2007 they filed a schedule I. For 2008 they break the threshhold of 100 participants makeing them eligible to file Schedule H. But reading about how to count participants and the IQPA audit requirement I came across this rule.. the 80-120 rule exception. It states: Exceptions to the Audit Requirement 80 to 120 Participant Rule If the number of participants reported in Part II, line 6, of Form 5500 is between 80 and 120 and a Form 5500 was filed in the prior year, the filer may elect to complete the current year’s Form 5500 in the same category (large or small Plan) as was filed in the previous year. For example, if the number of participants at the beginning of the Plan year is 110, and a Form 5500 was filed in the previous year as a small Plan (Schedule I was filed instead of Schedule H), the filer may elect to continue to file Schedule I and forego the audit requirement. However, if the participant count is 121, then regardless of what category of Plan was filed in the previous year, the current year’s form 5500 must include Schedule H and the Plan must be audited. Since the audit requirement is solely dependent on the number of participants, an accurate participant count is critical. A Plan sponsor has the option of distributing participant account balances for inactive participants providing their vested account balance is $5,000 or less. Accordingly, if your participant count is such that you may be required to have the Plan audited, you may consider distributing inactive account balances under $5,000 to the participants prior to the end of the Plan year. Does this work? Can I file a schedule I continuously as long as I dont exceed the 120 participant number each year?

It was my understaning that the pension trust is its own animal... by obtaining an EIN for it you have protected any other entity that the sponsoring entity may have from being mixed up with the plan. Also, when a participant terminates or retires and is paid out, you dont want the 1099R to be associated with the plan sponsor.... it is not the plan sponsor who is distributing funds to the terminated participant, it is the plan which is identified by the EIN on the 1099R. I have to admit that many of my plans are so small that I maybe generate a handful of 1099s a year (lucky me). Small closely held businesses with little turnover in their workforce. Im afraid that if EINs were frozen due to inactivity then when a 1099 is generated it may not be, um... recognized??? I have not seen any fallout as of today with that issue... hopefully I never will. As for the sole prop. who uses a SS# on their schedule C and who sponsors a plan, I tell them they need an EIN once the form 5500EZ is needed and that maybe now is a good a time as any to get an EIN and switch over... unfortunately, I am often out-ranked by the CPA and it is not done.

so... If I apply for an EIN for a plan and when the plan opens an investment account at some brokerage house and uses that EIN when opening the account, will that keep the EIN alive? If the plan doesnt have it's own EIN the businesses EIN is used? What if the plan sponsor is a sole proprietor... and doesnt have an EIN but uses their SS#. The form 5500EZ (usually a solo plan) does not allow a SS#... what then?

If a participant owns company stock inside the plan greater than 5% of the total stock out there, is that participant considered to be a 5% owner? He does not own more than 5% of the stock outside the plan.

Not moving quickly at all... Currently a PS plan. There is no employer stock in the plan... just some large account holders who are interested in riskier investments. I appreciate anything and everything anybody has on these Diversification Distributions!!!

"Diversification Distributioin"... that sounds like exactly what they want to do. The participants of this plan with large account balances want the ability to diversify their account but keep the plan itself very clean. The idea is to present to the large account participants an option to withdraw part of thier account balance (in the form of a distribution) and roll it into an IRA where the money can be invested outside the plan in assets with more risk. Of course it is not a viable option if the participant is hit with a 10% penalty.... but if rolling the $ into an IRA releives the participant of that penalty, then this will work. I guess the question is, will the plan document allow this type of distribution or can it be written into the adoption agreement.

I am being told there is a way for a participant of a plan... less than 59-1/2... to take an in-service dist without being assessed the 10% early dist penalty. I dont know of any such rule.... am I missing something or is my source wrong. The participants who want to take the dist are active employees... active participants of the plan. They simply want to withdraw some of their plan balance to invest outside of the plan... roll the $ into IRAs and invest in real estate. The dist would be from a qualified plan and into an IRA. Not taken as cash. No Hardship... No disability... No RMD... simply want to take some $ out and invest outside the plan to keep the real estate investment outside the plan for admin reasons. Thanks

I have a plan... 3 ees Comp/deferrals 1- 168,000/15,500 2- 142,000/15,500 3- 37,000/0 SH Match... What is the max contribution for this plan? Please display each EEs ER contribution. Thanks!

I know that an EZ filer will need to file a final if and when the plan is terminated and rolled over or distributed. My EZ filers know this. My curiosity was just ... until it is needed on the EZ do we need to apply for it? Maybe this is off the subject but... Can I Sole Prop apply for the # and still use his/her SS# when filing their schedule C? basically get the ein solely to put on the EZ? AND... would including it on the EZ keep it from being deactivated? Thanks

When I set up a plan I apply for the EIN for the plan. The plan does have its own EIN (TIN) The question is.... does the plan sponsor have to have an EIN or can they simply use their SS# up to the time where they will be required to file an EZ? These are one man show plans.... no EEs... NO filing requirement since the assets are less than $250K. I have run into instances where the new plan sponsor wants to use their SS# and not apply for an EIN. They are schedule C filers on the business side and want to keep it flowing on that side by continuing to use their SS#. I see not reason why they cant continue to use their SS# UP TO the point where they are required to file an EZ.

I know that the form 5500EZ requires that the plan sponsor have an EIN... the EZ will not accept a SS#. BUT, up to the point where the sponsor must file the EZ I cant see that it is required that the plan sponsor must apply for an EIN. A self employed individual filing a Schedule C can use their SS#. So... am I safe to understand that (as stated above) a SoloK client does not have to apply for an EIN for their business until they are required to file the EZ? Thanks

In the park HR.... evil empire in the basement. Fun ball to watch.... hope it lasts!

A participant has quite a bit of $ in the plan. Straighe PS plan. Wants to take a good chunk out. He is older than 59.5. He is not terminating.. it is not a hardship... he is more than a 5% owner. Just wants to take $200K+ out to invest in a business with one of his children. Can he do it? Thanks

Dr. turning 70.5 in August, 2007 Dr. Works for teaching hospital... receives W-2 (assuming a 403b... not my client) Also owns practice where he is a 50% owner. As long as he is still employed by the hospital and receives a W-2 he does not have to take a RMD. The practice of which he is a 50% owner he does... correct? Thanks

ahh... the letter is from the IRS... it is a followup to a letter he received from the DOL. What I have read is to put everything on the table and have a plan to fix everything.... assure them that it will not happen again by having new procedures inplace (new TPA, not rely on the CPA to file) and do it QUICKLY! I am guessing a "TSL" (tear soaked letter) attached begging that penalties be waived is the only course to come away with his shirt still on his back?

I was called by a man who has a plan where he is the only participant. The financial institution who established the plan did not tell him he needed to file an EZ once the assets were greater than $100K (or that is his stroy and he is sticking to it). The CPA completed the EZ going back to 2004 and 2005. He received a notice from the DOL stating he owed $8800 in penalties. He produced for me some good info to argue that possibly he was a victim and if possible could the penalties be waived. I looked at the DFVC requirements and learned that a one participant 5500EZ filer is not eligible. I have a call into the DOL to ask what his options are. Has anyone any experience in a similar situation? Thanks!

Can you point me to anything that would verify your statement? Something to hang a hat on? Thanks, appreciate it.

Anyone?

I was asked.... if a client missed a RMD back in 2005 and the 50% penalty tax was paid.... does he still have to take the 2005 RMD in 2006 in addition to the 2006 RMD? it was suggested to me that... "hey, he missed it, he paid the penalty so the only RMD needed to be withdrawn in 2006 would be the 2006 RMD. Thoughts? Thanks

Can someone provide me a cite that will convince a new client that he can deduct the contribution for 2006 eventhouugh the contribution is paid in 2007?

Can someone explain to me the same desk rule... Thank you

that's what I was told... Thanks