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Found 6 results

  1. Hi all! first time posting here. I have a 401k plan where in 2019 plan year a excess SH contribution was identified, the auditors made us move the excess match to "Excess contribution payable" as a liability and reduce the SH contribution line on the financial statements. Nothing was done to schedule H. The excess SH from 2019 was put into the employer's forfeiture account. How do I fix the reconciling payable in the 2020 plan year financial statements? Should that SH excess been a payable at all if the amount was going to go into forfeiture and not paid out by the plan? Any insight is appreciated.
  2. What is the tax reporting on an excess pre-tax deferral that happened in a 401(k) for calendar year and plan year 2019, but was distributed in April of 2020 from a rollover IRA account? Plan trustee sends a corrected 2019 1099-R in April 2020 with the lower/corrected amount. For example, $40,000, but excess was $10,000, so the corrected 1099-R shows $30,000 on the corrected 2019 1099-R. The IRA custodian reports a 2020 1099-R with a code 1, so the funds are subject to an early distribution penalty as participant is under 59.5? Any help to explain how the plan should have reported and participants should have handled with 2019/2020 ind taxes is much appreciated.
  3. The Company sponsored a SEP with 2 participants. It turns out 1 participant provided no services to the Company and was ineligible to receive SEP contributions. Does that mean the other participant's SEP account could be disqualified?
  4. I have a heckuva mess on my hands and need some help sorting out the solution. Client was sole prop/no employees in 2012, and opened a SEP/IRA with Vanguard in June 2013 (missed the solo 401k setup deadline) Contributed a total of $32,909 to the SEP in June 2013 for tax year 2012, of which $17,000 was erroneously included as deferred compensation, and is an excess contribution. This mistake was just discovered this week. Formed S Corp in early 2013, and opened a solo 401k with Vanguard also in June 2013 for 2013 contributions. No employees. Salary deferrals for 2013 reported on W-2 as 12DD are $17,500, but only $14,318 has been contributed so far. Remaining contributions to be made by April 15 to bring the total employee contributions to $17,500. Employer contributions to the 401k for 2013 total $14,530.50. There are additional employer contributions accrued on the books, but have not been made yet. My questions are: 1. Can I get the plan administrator (Vanguard) to return the 2013 employer contributions to the 401k of $14,530.50 without penalty if done so before the tax filing deadline plus extensions? 2. Can I recharacterize or rollover the SEP/IRA excess employer contribution of $17,000 into the 401k plan without triggering penalty or a taxable event, since the SEP/IRA contribution was made in June 2013? 3. I realize I have to file an amended 2012 tax return for the client, but because she was a sole prop in 2012, there are no amended W-2's to deal with. Any help or advise is greatly appreciated. I am sweating the penalties I will have to pay if this scenerio isn't feasible.
  5. Sole proprietor with no employees made improper elective deferral of $17,000 to SEP/IRA on 2012 tax return. Employer contribution OK. Error discovered after October 15, 2013. Can I get a confirmation that this is the correct way to remedy this? Amend 2012 tax return and remove excess elective deferral of $17,000 from line 28 of 1040. Pay 6% excise tax on 2012 Form 5329. Include form and payment with 1040x. Excess contribution remains in the SEP/IRA account, and there are no reporting requirements on custodian's part to the IRS (other than the 5498 which reflects the total contributions made for 2012, including the excess contribution). Carry forward $17,000 to 2013 as a deduction, subject to the 25% limit . Is the 5329 the proper form to report and pay this 6% excise tax? If the $17,000 is completely applied on the 2013 tax return, does that mean there is no more 6% excise tax required to be paid?
  6. We have an employee that contributed to his HSA after he signed up for Medicare. We have requested the return of the excess contribution. When we receive the funds back, we will pay him and withhold the proper taxes. I don't know what I need to do in Box 12 of his W-2 since the contributions will show up there. All of this has or will be done in the same tax year.
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