Late safe habor/profit sharing

[Chris DeMay]

Hello:  first year of employers plan was 2018.  The 2018 contribution was as for 70,751.10.  Plan sponsor is a sole proprietor.

61k of this was his self employed 401k/sh/and er ps

1750 was his spouses SH and er ps

The remaining 8k is for his rank and file sh and er ps.

Questions:

1)  I assume he goes through VCP to correct the late contributions, correct?  

2)  How do we impute lost earnings?  I would expect to find the market lower today than 10/15/19.

3) Any issues with deductibility?  I think we need to amend 2018 return for the contribution and deduct in 2020.

4) any other issues with 404 and 415 by making the 2018 contribution in 2020.  The 2019 contribution will be made by the 10/15 due date.

 

 

[Bird]

The SH is required and must be made.  The due date for 2018 was 12/31/19 and I believe that you can self-correct before the end of the next year.  I'm not sure what the interest rate is but it has nothing to do with market results - actually I'm not sure if they specify the rate to use but I think I remember using the late deposits rate.

As far as PS, that is an optional contribution and is too late for crediting to 2018 for any/all purposes.  You can say the contribution "was" X but if not made in a timely manner then it "wasn't."