TPApril Posted March 2, 2018 Posted March 2, 2018 Census reports zero hours for the owner of a company but maximum limit of pay. Just contemplating this before I get back to them - would he be counted in the ADP test as a zero? Is this W-2 pay?
Bill Presson Posted March 2, 2018 Posted March 2, 2018 I'm guessing the hours are just wrong unless s/he really did nothing in the business. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
BG5150 Posted March 2, 2018 Posted March 2, 2018 15 minutes ago, TPApril said: Census reports zero hours for the owner of a company but maximum limit of pay. Just contemplating this before I get back to them - would he be counted in the ADP test as a zero? Is this W-2 pay? Only the client can tell you if it's W2. What entity type is the company? I would believe an owner would be performing some sort of services for the company. Unless it's a partnership and all he took was draws and only had an investment relationship. Bill Presson 1 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
ESOP Guy Posted March 2, 2018 Posted March 2, 2018 My guess is they just don't record the owners hours as he isn't paid by the hour. He knows if he is working the time he is supposed to work. I would ask if he worked at least 1,000 hours.
TPApril Posted March 2, 2018 Author Posted March 2, 2018 I'm so sorry for omitting one piece of info that is exceedingly relevant. The owner was in prison for the entire year. 401king, Bri and Bill Presson 2 1
Patricia Neal Jensen Posted March 5, 2018 Posted March 5, 2018 LOL! Patricia Neal Jensen, JD Vice President and Nonprofit Practice Leader |Future Plan, an Ascensus Company 21031 Ventura Blvd., 12th Floor Woodland Hills, CA 91364 E patricia.jensen@futureplan.com P 949-325-6727
ESOP Guy Posted March 5, 2018 Posted March 5, 2018 On a serious note I would make the client go to an attorney and have them tell you how the plan should view the compensation.
Belgarath Posted March 6, 2018 Posted March 6, 2018 Perfectly possible that client performed legitimate services while in prison - correspondence, corporate decisions, etc. - I would check with the CPA first, to see how this was paid, (W-2, Schedule C or K, etc.) and then move on from there once you have that information.
Bill Presson Posted March 6, 2018 Posted March 6, 2018 On 3/2/2018 at 5:42 PM, TPApril said: I'm so sorry for omitting one piece of info that is exceedingly relevant. The owner was in prison for the entire year. Wow. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
TPApril Posted March 6, 2018 Author Posted March 6, 2018 I endeavor to leave out my own editorial comments. Turns out that with no owner related 401k contributions, the plan passes the ADP test, which was the main concern. Even excluding the owner who made and received zero contributions of any sort, so as to increase the HCE ADP for a worst case scenario, the test passes. Bill Presson 1
Lou S. Posted March 6, 2018 Posted March 6, 2018 Spend a whole year in prison and still get max comp? Who says crime doesn't pay.
ESOP Guy Posted March 6, 2018 Posted March 6, 2018 36 minutes ago, TPApril said: I endeavor to leave out my own editorial comments. This group will make them for you!
Patricia Neal Jensen Posted March 14, 2018 Posted March 14, 2018 I don't think this money is "compensation." Dividend? Patricia Neal Jensen, JD Vice President and Nonprofit Practice Leader |Future Plan, an Ascensus Company 21031 Ventura Blvd., 12th Floor Woodland Hills, CA 91364 E patricia.jensen@futureplan.com P 949-325-6727
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now