Basically

There was no PS contribution for 2023... no 415 issues to worry about. That is what we are going to do, allocate the (actually) $4100 to everyone pro-rata. Thanks!

Yup. so the $2700 has to be paid back to the business.... OR everyone can share in that $2700 as a PS contribution pro-rata.. won't be much but that is an option, right? Thanks!

This 401(k) plan was moving along very smoothly. Then I discovered that for the owner (who didn't defer this year) received a match contribution ... on nothing. The CPA told the bookkeeper to put $4500 in for him. Who knows what he was thinking. We have some true-ups for the other employees that we will eat up most of the $4500 but there is still a some left ($2700). To remedy this can the owner put in the $2700 as a Roth deferral which would me batches 100% because it is so small? Amend the W2? or is it too late?

I think this is a softball question and I'm sure I will be told to look at the document. A participant is 66. She is ceasing her deferrals and the match will be up to date. She will still be employed but wants to withdraw her full account and roll it into an IRA. The rules state (right from the IRS page) - > Generally, distributions of elective deferrals cannot be made until one of the following occurs: The participant dies, becomes disabled, or otherwise has a severance from employment. The plan terminates and no successor defined contribution plan is established or maintained by the employer. The participant reaches age 59½ or experiences a financial hardship. Same rules apply to the SH Match. So, sounds like she can take her $$... right?

That explains it! I so appreciate the help. Watch, after all of this finding out how to do this the client will decide not to (which is fine with me).

Got it... "After-tax" so when converted to the in-plan ROTH no taxes need to be remitted. Explain to me... If someone deposits an "after tax" voluntary contribution to a plan, does it need to be converted to Roth? Wait, did I just figure it out? Converting it starts the Roth clock?

I know adopting a SH plan for 2023 is out. What about just a PS plan and then converting it to a SH plan for 2024? That should be perfectly fine, right? Date of adoption would be say today, 2/2/24 Effective date I could say 1/1/2023?

That was my understanding (not that it couldn't be done through payroll) This is all perfect, thank you all

This client is thinking they want to max out 2023 right now if that's allowed and then towards the end of the year they might be able to max out for 2024. Comes down to not exceeding the 415 limit. They don't want to miss the 2023 opportunity. Follow me? (or her financial advisor's thinking?) I guess my question ultimately is, can VAT contributions be paid after the year end like a PS contribution?

Very interesting... I will need to wrap my brain around this.

A single member plan owner asked if they can make a Voluntary contribution to the plan now (in 2024) for 2023. AND, can it then be converted into ROTH money. Follow up question is, I know the client can not contribute in excess of the 415 limit. They would be limited to the 415 limit or whatever their compensation is... whichever is less, right? hmmm, if the voluntary contribution is after tax going in, when converted do we withhold taxes on the conversion? I have to look around and see what I can find.

Can't be greater than 6%... Answered my own question. NVM

I have a plan, the sponsor wants to have a SH Match of 100% up to 25% of compensation. Can this be a SH Match formula? And... in the future, will this design satisfy Top Heavy ? (of course those employees who are eligible but don't defer will need to get the 3% TH Min).

Really? I'll have to read the doc. I guess I assumed there was an IRS limit. After I posted I though... "give them the 3% and then sweeten the pot with a PS NEC if they want. That way they are not locked in". Appreciate the response. Always good to know in any event.

What is the maximum SH NEC % that can be written into a SH plan? 6%

EXCELLENT! Thanks I looked and looked and obviously skimmed over that . Appreciate it.

Yes... I thought it through. I guess I always assume a Schedule C filer is the only employee. On the Schedule C there is a spot for pension deduction in Part II Expenses but that is for the pension contribution for the employees (if there are any), not the owner. Line 31 of the Schedule C is the number to use for the calculation. Looking at the forms... where does the owner deduct his/her pension contribution?

I just need some clarification. I know how to do the calculation. The profit figure to use is line 7 of the Schedule C? Line 7 profit multiply by 1402(a)(12) deduction (.9235) calculate and deduct FICA calculate and deduct MED Back into plan contribution Add it all up and the result is Line 7 Right? I want to explain it succinctly to the financial advisor.

Yes, totally agree.

So it's a plan design decision. It's allowed, just has to be written in the document. I will check the document. As a default I'm sure that is how I have it. Thanks

I think this might be a no brainer. But then there are so many nit-picky rules. A potential new client is asking questions. Within the email I received there is a bullet item "Rollover funds entirely". I asked for clarity, wanted to know what the intention was. I know they can't just dig into their plan balance and roll out employer contributions whenever they want. That said, if they rolled money into the plan into a designated rollover account from an IRA or a balance they had as a participant in another qualified plan, can they take a distribution from those plan accounts at any time? Thanks

Got a call from a CPA who asked if there is a rule that eliminates the IQPA audit rule for a plan that has more than 100 participants. He said this plan is a SH plan. I told him I didn't think there is any relief. Am I mistaken? Anything?

Is this obvious? RIA sends clients to his insurance business and visa versa? Or is that fine. It's all about providing a "service"... Like a doctors office and a medical billing company. One can't exist without the other. Thanks Zeller, I guess I didn't go as deep as page 45. I'll take a look

Based on the response from the client, there is no control group issue. ASG.... there could be but I need to better understand how to determine if one exists. My head is ready to explode reading about and just scratching the surface of FSO, A-org, B-org and what it all means. Is there a grid or something somewhere that I can use to input all the players to help determine my answer?

Bob owns his own RIA 100% pushing investments. He also owns a 50% stake in an insurance business. No control group. The insurance business has 4 EEs. If they setup a 3% SH 401(k) plan I don't have to worry about Bob exceeding the 415 limit if he maxes out the RIA business. Correct Of course I need to watch the 402(g) limit.