Message Boards Digest

February 17, 2023

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

401kSteve created a topic in Retirement Plans in General

To True-Up or Not to True-Up... That Is the Question.

"Company has a safe harbor match 401k plan. The owner is self-employed, Schedule C. He has several employees who will defer on a payroll by payroll basis, and he would like to fund safe harbor match is contributed each pay period, and not provide a true up, as that's how his other employer, where he is just a W2 employee, operates. We won't be 'paid' via payroll on the business in question, his income would be determined via his schedule C after the year in over. Once he knows his income figure (after year-end), he would like to contribute to the plan based on his Schedule C, self employed income, and deposit his deferrals and the appropriate match after year-end. Is there a way to structure this? If the determination period is 'End of Plan Year', then he'd certainly be able to participate as he wants, but would also be required to provide everyone with a true-up. If the doc's determination period is 'Each Pay Period' that does not allow for true ups, but would that negate his ability to participate since he's technically not participating on a payroll by payroll basis? Would he technically be providing himself a true-up but not everyone else? Thoughts?"

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AJC created a topic in 401(k) Plans

Maxing Out 401(k) Plan and Roth IRA

"A client over age 50 is self-employed. He has net Sch C income of $20,000 for 2022. No other earnings. No partners. No employees. He wants to contribute $18,587 of either pre-tax deferrals or Roth into his 401(k) plan 'and' $6,500 into his Roth IRA. I think it is okay. Any issues with this?"

2 replies so far   |    Click Here to Add a Reply

AJC created a topic in 401(k) Plans

Using 2021 Forms 1096 with 2022 Forms 1099-R

"Our office orders free tax forms from the IRS every year. For 2022, half of the forms 1096 we received from the IRS in our forms order have 2021 in the upper right corner instead of 2022. Is it okay to use the 2021 forms 1096 for the transmittal of the forms 1099-R?"

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Jen Preston created a topic in 401(k) Plans

SIMPLE IRA for an LLC and 401(k) Plan for a C-Corp - Same Owner

"Client currently owns an LLC that sponsors a SIMPLE IRA for herself and one other W-2 employee. Same client wants to start a C-Corp and new 401k Plan. I understand that this creates a Controlled Group. But is this even allowed? What needs to happen with the SIMPLE IRA if so?"

2 replies so far   |    Click Here to Add a Reply

Jeannine created a topic in Retirement Plans in General


"A husband and wife are both self-employed and 50% owner of each other's companies. Wife's company has (1) W-2 employee. Husband's company is hiring (1) W-2 employee. They want to start a Simple IRA under wife's company, they will both participant including the employee under wife's company. Can employee (2) under husband's company also join the Simple? Or would each company need to set up their own Simple IRA? Thanks!"

2 replies so far   |    Click Here to Add a Reply

steve45 created a topic in Distributions and Loans, Other than QDROs

RMD Under SECURE Act 2.0

"Hi, hope all of you are going great. I’ve a question regarding required minimum distribution (RMD) and the scenario as follows: Plan Year: 12/31/2022 Participant’s age as of 12/31/2023 turned to 72 Does he/she need to take RMD in 2022 Plan Year? Or he/she will be eligible to take RMD in 2023 Plan Year (turns on his 73th) Appreciate your insights."

1 reply so far   |    Click Here to Add a Reply

RayJJohnsonJr created a topic in IRAs and Roth IRAs

Help with Potential Inherited IRAs and Best Planning Techniques

"An 85+ year old client has a terminal disease and has a life expectancy of several weeks to maybe a few months. This person has no spouse and has named his four adult children as beneficiaries of about $300k each. I've read everything I can find on the new Secure Act rules, and it seems the best planning the beneficiaries can do is inherited IRAs and withdraw the money over a 10-year period. But I'm not even sure that's correct. Can the beneficiaries implement inherited IRAs to receive their distribution from the deceased's pension plan If so, is the period during which they must withdraw the money 10 years? And if so, must withdrawals be level or can they wait 9 and 1/2 years and take all the money at once? Or decide each year how much they want as long as they take it all out in 10 years? Is there a tax deferral strategy that's better, if deferring taxes is their goal?"

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