justanotheradmin Posted February 29, 2024 Posted February 29, 2024 From the instructions: "Line 18. Contributions Made to the Plan. Show all employer and employee contributions either designated for this plan year or those allocated to unpaid minimum required contributions for a prior plan year. Do not adjust contributions to reflect interest. Show only employer contributions actually made to the plan within 8½ months after the end of the plan year for which this Schedule SB is filed (or actually made before the Schedule SB is signed, if earlier)." What are folks doing when the amounts actually deposited during the year are way more than needed? Assume they will file Form 5330 and pay excise tax. On the Form 5500-SF (I work only with small DB plans) do you put the full amount of the deposits? And just the amounts actually allocated for the year on the Sch SB? The Sch SB amounts will be lower than the contributions on the 5500-SF. Is it okay that they are different? Assume the plan cannot be amended to increase benefits (which is now an option for 2024 per SECURE 2.0). I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
Bri Posted March 1, 2024 Posted March 1, 2024 Way more than the minimum contribution, or way more than the maximum deductible?
justanotheradmin Posted March 1, 2024 Author Posted March 1, 2024 1 hour ago, Bri said: Way more than the minimum contribution, or way more than the maximum deductible? Both. I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
Lou S. Posted March 1, 2024 Posted March 1, 2024 I don't think the SB makes a distinction between deductible or non-deductible. I believe you would report them as contributions, assuming they are in the Plan Year and not post year end which could be dealt with in the following plan year. Then you either have carry forward balances to maintain or a plan that likely has a very small MRC until you eat up the excess in future years. Then you would report the nondeductible contributions on Form 5330. acm_acm 1
Popular Post C. B. Zeller Posted March 1, 2024 Popular Post Posted March 1, 2024 Schedule SB is used to designate a contribution for a particular year for 430 (minimum funding) purposes. There is no indication on the SB for which year a contribution is designated for 404 (deduction) purposes. There is no requirement that the 430 and 404 years be the same for any given contribution; if the timing permits, you could count a contribution towards 2023 for minimum funding but 2024 for the deduction. If the timing of the contributions was such that they couldn't be counted as a 2024 deduction (for example, if they were made before the end of the 2023 tax year), and the amount of the contributions exceeds the 404(o) deductible limit, the sponsor may want to consider making a IRC 4972(c)(7) election to avoid the excise tax. The non-deductible amount would have to be carried forward and deducted in the next tax year. Calavera, acm_acm, Lou S. and 2 others 5 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
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