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Message Boards Digest

December 11, 2019

Here are the most recently added topics on the BenefitsLink Message Boards:

M Norton created a topic in SEP, SARSEP and SIMPLE Plans

Shave and a Haircut, Two Bits -- But How About Two Schedule C's?

"Barber X operates a barber shop as a Schedule C. Another barber ('Y') also works in his shop, who is paid as a contract employee for the past two year. Barber Y has reported her income on her own Schedule C, and contributes to her personal IRA. Barber X marries Barber Y, but the working arrangement remains the same. Barber Y is considering starting her own SIMPLE IRA for her Schedule C income. Can they really maintain two Schedule C's when Barber Y is working in Barber X's shop? Are there any controlled group issues that would affect a SIMPLE IRA due to attribution?"

Number of replies posted  3 replies      Number of times viewed  30 views      Add Reply
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ldr created a topic in Retirement Plans in General

Deferred Compensation: Can Be Basis for 401(k) Contributions?

"I have a client who was a W-2 employee during January through September of this year. His employer didn't have a 401(k) plan. He made no contributions to other plans. As of October 1, he changed his status to 1099 contractor for the same company. When he changed his status, it triggered deferred compensation: a lump sum of $400,000, which he will receive at the end of this year. For October through the end of the year, he will receive approximately $60,000 of 1099 income from the new consulting business. Both the owner and the spouse are over 50 years old. He wants to max out his Owner K to help defer some of this very large tax bill. Can he use some of the deferred comp? Or can only the 1099 income go into the Owner K? Same question for the wife. It was previously stated that she could receive a contribution, but is her limit subject to the 1099 income, or can the deferred comp dollars count?"

Number of replies posted  3 replies      Number of times viewed  42 views      Add Reply

chuTzPA created a topic in Cafeteria Plans

Same Dental Benefit But Employer-Sponsored for Some, Voluntary for Others

"Dental benefit is provided for management, under 100 persons. It is offered as a fully voluntary benefit for staff. So total covered persons are over 100. I'm trying to figure out if this makes it an ERISA-covered benefit, among other things requiring a Form 5500 be filed."

Number of replies posted  2 replies      Number of times viewed  21 views      Add Reply

Brandon1997 created a topic in 401(k) Plans

SMM Required When Changing from Integrated to Cross-Tested?

"Does a change from an integrated formula to a cross-tested formula require a Summary of Material Modification?"

Number of replies posted  2 replies      Number of times viewed  48 views      Add Reply

BG5150 created a topic in Distributions and Loans, Other than QDROs

Can I Get Around an RMD This Way?

"President of a Chamber of Commerce currently has a Simple IRA. They are starting a 401(k) Plan in 2020. He will turn 70.5 in 2020. He wants to avoid an RMD. My reading of the rules says that for any IRA, there is no 'if still employed' rule, and an RMD must be made. But what if they liquidate the account on December 28, 2019, and don't deposit the check in the 401(k) plan until January 15, 2020? That way, the IRA has zero balance on 12/31/19. The 401(k) plan won't have any balances until 2020."

Number of replies posted  2 replies      Number of times viewed  38 views      Add Reply

doombuggy created a topic in 401(k) Plans

Accidentally Missed Deduction of Deferrals from All Employees' Paychecks, But Only for One Payroll Period

"So I have a client which, through a clerical error, did not deduct 401k deferrals for the 11/29/19 paycheck. We discovered this yesterday. If they give notification letters out to the affected participants, do they still have to do a QNEC, since it has been such a short period of time and just one payroll? They apparently only do medical deductions 2x per month, but are paid bi weekly, and this was the 3rd pay check for November, so no medical deductions, but someone accidently cleared out the 401k deductions."

Number of replies posted  0 replies      Number of times viewed  23 views      Add Reply
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