Partnerships, LLCs, LLPs, and similar entities create unique issues for retirement plans. The issues practitioners know about are serious and problematic, but are really just the tip of the iceberg. There are many more issues that lurk beneath the surface and which potentially pose problems.
This presentation analyzes the issues in depth, with an emphasis on real world, practical approaches to the problems and uncertainties in this arena. Topics include:
** How are they treated for tax purposes?
** What happens when a partnership or LLC gives an owner a W-2?
** How do you compute earned income?
o What affect do guaranteed payments have on earned income?
o Do limited partners have earned income?
o What do I know to know to compute earned income that the K-1 doesn’t tell me?
o Do silent partners who don’t participate in the business have earned income?
o When is earned income earned? (You’d be surprised how many practitioners get this wrong)
o When is earned income currently available? (This is a different question from when is it earned)
o What is the deadline to deposit deferrals?
o Do limited partners have earned income? Who is a limited partner?
** How does earned income interface with nondiscriminatory compensation?
o What special adjustments have to be made for partnership compensation?
o When can a simple compensation definition create a benefits, rights, and features problem for a plan?
** Dealing with partnership losses
** Partnership issues in cross-tested plans
** Handling common control issues
There are no prerequisites or other advanced preparation for this program. The instructor will assume attendees have a basic understanding of the operation of 401(k) plans and have a minimum of two years of experience.
Instructional Delivery Method: Group – Internet-Based
NASBA Field of Study: Taxes
Speaker: S. Derrin Watson, J.D.
Recipient of ASPPA's 2006 Educator of the Year Award
After attending the program you should be able to:
** Determine the taxation of an LLC or similar entity
** Explain how the way an entity is taxed affects the retirement plan of the entity
** List the issues involved in determining a partner’s compensation
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