Basically

Each employer can contribute on behalf of the employee as long as each employer is not affiliated. Each plan has a contribution limit know as the 415© limit. That is a per plan limit If your question is can the employee make deferral contribtions to all plans he/she is apart of, the answer is yes. The catch is that the total of all the deferrals made to all the plans he/she is apart of can not exceed the 402g limit for the calender year. The 402g limit is a limit imposed on the individual, not the plan. 2004 402g limit is $13,000. If the employee is over the age of 50 then he/she can defer an additional $3,000

WellSpring, I am glad you made the point to be the squeeky wheel... My "MO" regarding soliciting has been to gently revisit each favorable lead with a follow-up... keep my propaganda at the top of the pile, but at the same time dont be annoying. I know that a CFP,attorney, or CPA is not going to instigate a change to their client if there really is no reason to. If it aint broke.... GSHAC has made some excellent points which I put into place when I took over this business in '99. Raising my fees a little to see if the "complainers" would drop off (none did) and creating a niche, focusing. To qoute myself I think that GSHAC's response to that statement would be to find a flaw, expose it, and then run with it. Now to come up with that catchy phrase...hmmmGSHAC mentioned FedEx... does anyone know where that business plan came from? The guy who started it (Fred Smith?) was a student at Harvard Business School and the idea was a school project. "Fly everything into one location and then fly it out again.... overnight? will never work" The teacher said... failed him. Eh...the rest is history, or so that is what I was told. Thanks for everyone's comments!

I understand that it is an individual limit... are you saying that neither plan needs to make a correction and that the individual will simply be penalized by the IRS for the mistake? If so, what will the penalty be? an excise tax based on the amount of the over deferral?

This is not my plan so I will find out... but, if they are not related you do not correct? the $ stays in?

I looked at old posts... here is what I found. If a participant is in 2 plans and ends up over deferring for 2003, one plan needs to distribute the excess prior to the current year end, 2004. That plan will issue a 1099R and the participant will be responsible for taxes on the overage in the year of the distribution (2004). Also, the participant's W2s for 2003 will show that he/she over deferred and will end up being taxed for the overage. Double taxed! What else? anything?

Ok... is this a first? I need some $ to grow my business.... I have a client that has a pension... if he invests in my company would that be a prohibited transaction? If it is pension assets I am sure it will be... but personal $$?

I am no CPA... do not handle IRAs.... I do know there is a difference between a ROTH and a traditional IRA. My question is .... can a participant roll assets out of a qualified plan into a ROTH? Advantages.. disadvantages? Thanks!

Got it... thanks !!!

True.. ok, 1099 is not the way to be paid. What I have been told is it is a Sub S corp and (not being a CPA) if I understand it correctly, at the end of the year she, as a partner in the business, will receive her share of the profits which will be her compensation and in turn a contribution can be based. Her projected income will have to be $164k to receive the full deductible $41k (25%) contribution. Her $13K salary deferral will be paid through her other employer. The husband will not make a deferral (or his ER cont will be reduced by the $13k deferral keeping him under the $41k limit). If this sounds right my question is how does she get paid... not a 1099 but what... Thanks for the help!

What about 1099?

Situation Update!!! client has SE business "A". Also corporation "B". Wife works for totally unaffiliated company "C" in addition for company "B". Client wants to max out company "B". He is going to make contribution to company "B" for himself and wife... $82,000 ($41K each...no deferral, corp contribution only). Wife will also defer $13,000 at company "C". 402g not violated... Ok?

Because he is the owner of both businesses... thats what I thought. He will be limited to 41K total between the plans (deferrals included). Thanks

Client was SE as of 1/1/04 until recently and has made a $13,000 deferral to a Solo K for 2004. He has since closed a huge deal and his CPA told him to incorporate. He wants to establish a plan for the corporation. Can he make a $13,000 deferral to the SE plan from SE $, and in addition make a $41K contribution (no deferral) to the incorporated plan from the proceeds of this deal? This will mean he is going to shelter $54K for 2004 between the 2 plans... ok?

Even if there is only one participant in the plan and he is the trustee? I understand that rules are rules... your advice is appreciated. Just trying to make this as painless as possible for me and the client.

Client has a PS plan... he is only participant. Has invested in limited partnerships, to the tune of $1mil plus. My question is how to value these investments... From the K-1? Based on cost? Obviously based on cost would be the easiest... but if valued at cost, would that be accurate enough in the event of an audit?

What if the safe harbor is a 3% 100% vested non-elective contribution... that satisfies the TH requirement and the employer can add a discretionary contribution as well and be safe... correct?

Thank you... I looked in the wrong place... I appreciate your link

Plan sponsor is paying out terminated EEs. Broker is going to generate 2 checks for each EE being paid lump sum.... one is vested balance, other is withholding. The client is telling me that his regular bank will not receive the tax deposit. What are his options for making the tax deposit? (this financial institution will not make the deposit for him) Can it be mailed to the IRS with a coupon?

Well... If you are at Fenway Park hating the Yanks is a given (go Sox!)

huh... I apologize if I committed a faux pas... should I not discuss fees? I dont see how any price fixing could come from it. As for filing a 5310 for this client, I did give him the option and told him that I have simply filed a final 5500 for other clients.. but felt it was my obligation to tell him. I have never had any problems not filing form 5310.. but now that I have said it I am sure I will.

What do people charge to terminate a plan (basic PS plan with 10 participants) ? and, does anyone ever Not file form 5310... simply file a final 5500? Client is balking at my fee... maybe he should drop the cost of a root canal from $750 to $200, talk about a racket!

Ok Blinky... then I will tell the owners they have that option (rolling the $ into the other plan) if they dont want to roll the $ into IRAs. Honestly, I am not going to worry about it too much since once the plan is terminated it is out of my hands. Of course I am assuming that if they roll the $ into the other plan they have to offer it to the other participants in the terminating plan... cant discriminate now can we.

I am not going to instruct the participants to roll into IRAs... simply informing them that they can take the $ and run (less withholding) or roll into some other retirement vehicle and not pay taxes. What was meant by the $ going into the DB plan is... doesnt the addition of additional outside $ affect the balance of the trust as a whole and therefore the added $ will skew the calculations and reduce the expected contribution.. as if the assets had a large unrealized gain? or will the $ simply be part of the plan and need to be accounted for separatly?

Thank you... I will tell the client to liquidate and roll into IRAs. DB plan (if it is a DB plan) will be better off without the added $ I am gathering since it will possibly reduce the amount that can be contributed. On the other hand, if they are finding it difficult to fund the DB plan then adding the PS rollover will help them... correct?

An old PS plan that has had no contributions for years is going to terminate. The client has another plan (I think DB plan). Does he have to offer the participants the option to roll their $ into the remaining plan if they want?