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Hello, Some background: I had a sole-prop some time back and had a self-employed 401k plan with Fidelity with EIN of sole-prop Then I created a s-corp and just used the same plan - changed EIN to S-corp, Name to a generic name - MKK-Plan. All good, no issues. I was thinking of shutting down the sole-prop but never did. Now, one of my clients (for whom I do most of my work) has changed their policy and want me to handle task based on sole-prop and NOT through my s-corp. Since I own both entities - S-corp and sole-prop, I'm assuming this becomes a control group and I can make contributions and profit share based on sole-prop earnings to the MKK_Plan as well. When making contributions, Fidelity asks for Employer Name and EIN and I assume, I'll still put in the S-corp name and EIN since that entity is Plan Sponsor, is that correct? Where on 5500 do I indicate that this is a control group? 5500 instructions suggest that I'm still a Single-Employer plan, is that right? Thanks for your assistance.

I have a prospective client who established a Solo 401k for him and his wife last year. He did not fund it. Turns out he has a part-time employee who was eligible. There is no hours or service requirement. Document preparer said that is their default when completing documents. He doesn't mind paying a safe match contribution to the employee, but the issue is that she was not offered the opportunity to defer. But how do we correct for the missed deferral opportunity when nobody deferred? is it possible to correct the original plan document to align with the client's intention? Retroactive amendment? Can we just pretend the plan never happened since it was funded or filed with the IRS? (just kidding)

Good afternoon to all, A prospect, a doctor, has one employee who is currently paid W-2 wages. He wants to terminate her as a W-2 employee and then engage her as a 1099-R independent contractor. After all that is done, the next month he wants to start up an owner-only type of 401(k) plan that covers only himself and his wife, who he will bring onto the payroll. Do you see issues with this? We feel like it's a very aggressive posture to take but not necessarily an illegal one. Your advice is always appreciated.

Hello. In April of this year(2019), I terminated my [single-owner] S-corp and the Solo 401k I had for it(filing final 5500ez, etc.). I rolled the Solo 401k funds into an existing IRA so I could terminate the 401k plan. I then moved from NY to FL and opened a new business, operating this time as a sole proprietorship. I contributed to the Solo 401k in Q1 before dissolving that business, but only $31.5k($19k employee deferral, $12.5k employer contribution)-- short of my limits for solo 401k or an SEP IRA otherwise. I planned on opening an SEP IRA starting in 2020, but now I'm finding I'd like to max deductions for 2019 more than I expected(I had more taxable events than planned), and was wondering if I could open an SEP IRA for the Sole Prop for the 2019 tax year? Vanguard says their interpretation is that I can't have two plans(401k and SEP IRA) in the same year, due to the same ownership/control of the two companies. When asked for them to point me to anything official to back up that position, they just vaguely pointed me to pub560-- but I can't find anything about multiple plans there, other than 5305-SEP requirements which shouldn't apply(as the 401k was terminated, and the 5305-SEP instructions specify 'presently maintain'; plus, that's just for using the form, not SEP IRA qualification itself). Is there anyone here that can answer this for me, pointing to some authoritative source? Thanks.

I have a two part question and need advise. I and another highly compensated partner started an s-corp. We have NO employees other than ourselves. We both own 50% of the company so we report the majority of our income on W-2's and the rest of the income is divided equally and reported as profit sharing on K-1's. In addition, the s-corp is a partner in a general partnership. There are 9 partners in the general partnership some are incorporated and some not. The general partnership has NO employees. My partner and I in the s-corp each opened a solo 401k and have been contributing to both. The s-corp as the employer and the two of us as the employees. My first question is, my partner and I, are we allowed to contribute to solo 401ks? Are owners of s-corps who are highly compensated with no employees other than themselves allowed to have this type of retirement plan? My second question is, our corporation allowed to start a retirement plan without including the other partners in the general partnership, I have not asked but the other partners in the general partnership probably have their own retirement plans. I would like to thank you for any time spent on this post. Sincerely, Tomf

I have a solo 401k with >$250k, so have to file. I have received contradictory advice on how to report contributions for, say, 2014, that are actually made in 2015. Some say that they should be included in calculating the end-of-year plan assets, rather than the actual balance on December 31. Others (including Fidelity) say to follow a cash balance rather than an accrual method and not include the deposits made in 2015 on the 2014 form. Another source said one follows a "modified" cash balance and therefor should include these contributions. Is there any consensus on this. Which advice should I follow? Thanks