Message Boards Digest

July 24, 2020

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

supernole created a topic in Correction of Plan Defects

401(k) Never Terminated While Funding SEP-IRA

"One-person sole proprietor adopted Keogh 401k (profit sharing /money purchase) in 2005 at Fidelity. Then advised by advisor at Fidelity to change to SEP-IRA for simplicity in 2015. Based on my income, I realize now I would have been able to contribute more had I stayed with Keogh. Never filed a 5500 although the balance didn't reach $250,000 until 2012 and I wasn't aware that I was supposed to terminate the Keogh upon opening SEP-IRA. Keogh (profit sharing /money purchase) has not been funded since opening the SEP-IRA in 2015. Also, since that time, I mistakenly did a backdoor Roth for tax year 2015 to 2018, thinking there would be no tax consequence but I realize now there is, because I have a SEP IRA.

My CPA doesn't want to help with this so I'm looking for guidance on whom to call for help. I assume I need a TPA but I'm wondering if I will be able to find one to help me because I do not have an ongoing relationship. Can anybody recommend a TPA in 32207 zip code area (Jacksonville FL) or one that would be will be able to help remotely?

What are my chances of getting a favorable decision with these issues using the VCP/SCP? Hopefully I can connect with a TPA to help me soon but if not should I file a 5500 before the July 31 deadline even if I will be asking for a retroactive termination of Keogh back to 2015 as part of the VCP filing?

I took an extension and have not funded my SEP-IRA for 2020. Based on my income and age, I would be able to contribute about $10k more to a 401k vs. a SEP-IRA for 2020 but I'm wondering if it would be a bad idea to adopt a new 401k for 2020 while still sorting through the mess with my old Keogh."

0 replies   |    29 views   |    Add Reply

glhotdog created a topic in Form 5500

How to Verify IRS Processing of Form 5500-EZ?

"Plan Sponsor wants to verify processing of Form 5500-EZ. Correct procedure to verify?"

4 replies   |    42 views   |    Add Reply

ITCONSTRUCTS created a topic in Retirement Plans in General

CPA Wants to Partner with a Freelance TPA

"I am CPA in California and looking for a freelance TPA whom I can partner with. Please message me if interested."

1 reply   |    37 views   |    Add Reply

cpc0506 created a topic in 401(k) Plans

Remove Roth from a Safe Harbor Plan Mid-Year?

"Can a client remove Roth from a safe harbor plan mid-year? I don't see any rules precluding this. Only 30 days notice as Annual Contribution notice is affected. Your thoughts?"

0 replies   |    12 views   |    Add Reply

John Feldt ERPA CPC QPA created a topic in Form 5500

2020 Form 5500-SF for Owner Only

"This is on the IRS website at:

  • Effective for plan years beginning after 2019, a one-participant plan can file Form 5500-EZ electronically using the EFAST2 filing system. Form 5500-SF is no longer used by a one-participant plan in place of Form 5500-EZ. Information for a one-participant plan filed electronically with EFAST2 filing system" will not be available to the public on DOL's website.
  • A one-participant plan covers only a business owner and his or her spouse, or cover only one or more partners or partners and their spouses in a business partnership (treating 2% shareholder of an S corporation, as defined in IRC Section 1372(b), as a partner).
  • A one-participant plan can file Form 5500-EZ electronically with the [DOL]'s EFAST2 filing system, or completing and mailing a paper Form 5500-EZ (PDF) to IRS.
  • However, a filer must file the Form 5500-EZ electronically using the EFAST2 filing system if the filer is required to file at least 250 returns of any type with the IRS.

I added emphasis in bold for the 2% S Corp shareholder, which was part of the Pension Protection Act. Does this mean an S Corp with only 4 employees, each owning 25%, can file a Form 5500-EZ? Doesn't ERISA still apply, requiring the normal Form 5500-SF?'

1 reply   |    25 views   |    Add Reply

Scuba 401 created a topic in Distributions and Loans, Other than QDROs

CARES Act -- Suspension Can Apply to Existing Loans?

"Is there anything in the guidance about outstanding loans that are not current. I know loans that are current can be suspended under CARES. Can loans that were not current benefit from suspension?"

0 replies   |    11 views   |    Add Reply

Archimage created a topic in Form 5500

Reporting a Roth Conversion on the Form 5500: Distribution/Rollover? Transfer?

"I generally see two schools of thought on this topic: [1] Process the conversion as a distribution and a rollover. [2] Process as a transfer and it is just a wash so no 5500 reporting. Does anyone know of any formal or informal guidance on either of these?"

0 replies   |    8 views   |    Add Reply

stephen20 created a topic in Form 5500

109 Employees But Only 48 Meet Entry Requirements -- Which Form 5500 to Use?

"I'm working on a plan with 109 employees. Only 48 employees entered into the plan (entry requirements: 21 years of age, 1 Year of Service) and received a Safe Harbor Non Elective Contribution. Should I use Form 5500-SF or 5500 Large? What is the parameter for this plan -- 48 eligible employees or 109 employees? Can anyone explain 100 participants rule for 5500-SF filing?"

2 replies   |    13 views   |    Add Reply

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