Basically

Bumping this post... Is there a worksheet to help re amortize a loan that was suspended during COVID?

This client has resurfaced... asking questions. Am I correct with this example... Let's say that when the dust settles for the year he has room for a $35K VAT contribution and he deposits it. He already paid taxes on the money. If he converts it right away via an in-plan Roth conversion his 1099-R would declare taxes on the earnings alone. The Gross distribution would indicate the total conversion but the Taxable amount would be the earnings alone. 1099-R Code... The code would be 2, early distribution (because he is under 59-1/2)... and G, Rollover? The money path and documentation... Where would the VAT contribution be deposited? Can it just be deposited into an account designated for the VAT contributions and then document the intention to do the conversion on paper? Simple as that? Or do we need to make the deposit to the PS account and literally transfer it to the VAT account? Have a definitive trail? Thanks

Thank you. That's a big help.

Simple questions for a cheat sheet I am making.... If a participant makes ROTH deferrals, that money has its own 5 year clock... Yes? If a participant continues each year to make ROTH deferrals, does that new money use the original clock start date? If a participant makes an in-plan ROTH conversion, I know that has its own start date. And every time they do an in-plan ROTH conversion the conversion gets its own start date. Here are the questions... all in-Plan ROTH conversions need to be in their own investment account... That account can be on paper... correct? My system will track it, that's all that matters, correct? Thanks

I feel it is easier for me to efile the form using my credentials. Similar to AC's process, the 5500 is sent to the client along with an efile authorization form. It allows me to have my finger on the pulse, to know exactly who hasn't filed yet in real time. I have only 1 client to whom I send a link and that is done way back in April. He is quick to respond and he gets it done. I would be nervous as heck if I was this close to the deadline and relied on the client to get the return filed by 10/15. My 2 cents

In my plan design I always put in that vesting does not apply when someone dies or becomes disabled. How is this applied if the employee terminates, the balance is left in the plan and then they die? I bumped the vesting up to 100%. Am I correct?

Thanks So what I gather is that Uncle Sam will get his taxes for each year. He allows you to push it off for the first year but then you get hit twice the second year. After that it's year to year.

Bob was born 3/1/1953 He turns 72 after December 31, 2022 therefore his RMD age is now 73 He turns 73 on 3/1/2026... he needs to take a 2026 RMD He can put off his 1st RMD payment as long as it is paid by April 1 of the following year, 4/1/2027. Q/ This payment he makes on or before 4/1/2027 represents the 2026 RMD based on his 12/31/2025 year end balance... correct? OR; is the deal he can put off his 1st RMD payment until 2027, the amount of the RMD is based on the 2026 YE Balance, but the catch is he must take it by 4/1 What I struggle with is if he puts off his 1st RMD (the 2026 RMD based on 2025 YE Bal) until 4/1/27 (the following year) and then he needs to take another one for 2027 based on the 2026 YE Bal, he is going to have 2 RMD payments hitting his personal account in 2027... a lot of taxes to come up with. Am I overthinking this?

This is a year by year application... If only EE deferrals and SH match, no NEC in 2024, then no sweating a TH requirement? I like to design a plan as simple as possible... not going to have all kinds of different kookie hour requirements. Otherwise Excludable employees... Always makes me think hard to get it right. I need a good publication that will explain clearly and simply this group of employees and how they affect testing. In the end does it come down to the plan design?

A SH match contribution is not dependent on hours of service... correct? if an employee is eligible to defer then they will receive a SH Match ...period. With regards to eligibility, it's only for the NEC and EE contributions that you could have in the design an hour requirement... right? With regards to TH, a plan that has no NEC contribution in the design is exempt from TH ... correct?

Thank you. Ya, doesn't make sense for one company to pay another company's contributions. And they are not filing a joint return. Looking at your responses I should have thought of that.

I have a new plan, everyone is part time. It's a SH Match. To be eligible to defer you only need to work for the company for 6 months, no hour requirement. CAN the SH eligibility have a hour requirement? will that screw everything up? My ADP test?

In the situation where you have a control group that use one plan.... It seams to reason that each company pays the contribution required for it's own employees... right? I'm talking a straight forward 3% SHNEC. Can Company-A pay Company-B's 3% SHNEC? (curious with this question) Just need confirmation, thanks

I have 4 missing participants with the following balances: $95.76 $52.07 $14.90 $39.56 We use Penchecks to process our 1099-Rs and we also pull the distribution fee that we charge from the participant's distribution. After all distribution expenses are deducted each of these payouts will have a negative balance. Can I zero these accounts out with expenses? or do I need to open missing person IRAs and get the expenses somewhere else?

Probably an easy question.... Single member 401(k) plan participant dies suddenly (2023). A 2023 RMD was issued. Participant's wife is the sole beneficiary. All plan assets are rolled out of the plan in April 2024. For 2024 the deceased participant does not need to take an RMD... right? BUT, if the spouse is RMD age, she needed to take an RMD... again, right?

I have the plan design indicating that all this is possible. I second guess myself and feel the need to scour the boards and ask. Thanks

I have a husband wife CPA firm. The plan is designed with a 59-1/2 normal retirement age. They ask if they can take partial distributions from their accounts and roll the money into their IRAs. Neither are RMD age. Anything wrong with that?

That is correct... I didn't think of that part.... the fact that upon distribution in kind withholding on it's value would be required. It's not worth it to me. And even though I spell out the rules, will they (the rules) be followed explicitly? I agree with EBECatty below Thanks for your responses

Coincidentally a single member plan client just asked if RE is an option. I Googled it.... This came up (ASPPA - Real Estate as a Plan Investment). It talked about distributions "in kind". Made me think...🤔 If this client purchased something, never used it herself, nor let any relatives use it and then when she closes the plan took the property in kind... would that work? I ran into an issue years ago where a wealth client was purchasing limited partnerships. The plan was audited and the agent pressed that the LP investments needed to be valued every year. For RE, I am guessing the "assessed" value for tax purposes is not sufficient? Then there is the technical aspect of the purchase and maintenance... the plan technically owns the property, RE taxes must come from the plan, maintenance comes from the plan. Thoughts?

So I have this plan with 4 terminated employees who each have a small residual balance due to interest/dividends. 1¢ $20.03 $8.92 $208.82 For the $208, we will send her the money.... issue a 1099-R. For the rest, send them the money... is a 1099 needed? I'd like to just expense it out. What does everyone do in this case?

Yes, as indicated by checking this option... [ ] I do not wish to have deferrals withheld from my wages and contributed to the Plan.

The client is going to bonus the participant outside the plan. I expressed to him that the plan did nothing wrong. I don't know the employee... maybe they are good at their job. He want's to just keep the peace. My opinion CuseFan, she has gall to go to her boss and say that "HE" messed up. I have had ZERO problems with the office manager or bookkeeping/payroll over the years. They have been thorough to a "T", always providing clear accurate info in a timely manner whenever asked.... and they pay their bill very quickly! This is a lesson for them... they won't let it happen again. Thanks everyone for your help!

Yes! I will point that out to him. I told the employer that the best solution is to fix this "outside" the plan. I also told him to press to this EE that SHE dropped the ball. I know him, he is a super nice guy. He will give her a bonus and let her defer it into the plan to make up for her error. Thanks for the responses!

Thank you both for responding. YES, that is what happened... in a way. She was give the deferral form but never turned it in. And of course the EE feels jipped. The plan sponsor is such a good guy and want's to make it up to her to keep her happy... doesn't want a thorn in his side. It sounds like the plan doesn't need to do any corrective measures. It sounds like the best course of action is to make her whole outside the plan with a bonus and she can turn around and defer it into the plan. Case closed. Sound like a plan?

I received an email from a client over the weekend. An employee thought they were participating in the plan, thought deferrals were being taken and thought they were getting the 5% match. This employee did notice that nothing was being taken from their check... didn't see the deferral on the W2.. and is still crying foul. Paperwork was provided to her be she never completed and returned it. The employer is willing to make her whole in some way. What is the best way to handle this? edit: I read that a QNEC can be made on behalf of the employee. If that is the answer, do I need to go back and issue one each year, amend each year's 5500? OR, can it be done all in one year and only amend the last 5500? Damn, another edit: The IRS link I am looking at states that the correction QNEC would be 50% of the ADP. So I need to determine what the ADP/2 is and that would be the corrective QNEC. It is a SH Match plan we need to make that contribution as well I would think.. right? Thanks