"Is the Earned Income reported on Form 1065 K-1, income for the individual for purposes of the 401(k) plan if the K-1 is issued to a P.C.? My answer is no, but I am second guessing myself and want another opinion. Scenario Plan Sponsor: LLP , Participating Employers are two P.C.s LLP has regular W-2 employees that participate in the plan. Those are not in question. The shareholders of the LLP are two Professional Corporations and are clearly listed by the P.C. names on the individual 1065 k-1. Think "Jane Garcia, a Professional Corporation". The LLP as well as the P.C.s appear to be listed as active with the Secretary of State. Line i2 says "What type of entity is this partner?" and it says S Corporation. Jane Garcia - receives a Form W-2 from her P.C. She does not receive a W-2 from the LLP. Jane is arguing that the earned income on the Form K-1, from the LLP to the P.C. counts as personal earned income to her and also as plan compensation. Since the actual shareholder is a corporation, and is listed as one both in name and entity type, my understanding is that the earned income reported on the K-1 is NOT personal to the individual. But I am getting so much push back from "Jane" and her advisors that I am second guessing myself."

"I thought I remember reading that the Mega Backdoor Roth contributions had to be made early in the year (I think it was 30 days after the close of the year). I just wanted to double-check to see if that is accurate? We have a client asking about it, so before I confirmed that they could start it for 2025 (and not 2024) I just wanted to be sure."

"Does anyone have a guide on how to download the correct file to be able to import year end data into the Allocated Link? Am Funds Recordkeeper Direct changed their reporting system and cannot provide us anything else. The .dat file no longer works. They advised us to contact Relius. Thought I'd check here first."

"This is a legacy plan with a set of long time partners. One partner has an LLC investment that pays out dividends, but the K-1 has shown a negative balance for two years now, with the most recent year even more negative. Not sure how to treat this for calculation of total assets in the plan?"

"If a plan uses the W-2 definition of compensation, then it is pretty clear that tips and overtime are included in Box 1 of W-2 and thus the exclusion of overtime and tips will not affect comp. But what about if the definition of comp is based income for purposes of withholding? If the IRS clarifies that qualifying tips and overtime are not subject to withholding, won't that create a problem? I am hearing that the IRS may do just that for 2026."

"I have a client whose previous TPA reported a late deposit on their 2023 Form 5500. The deposit was for a payroll dated 1/4/2023. The client provided the detail to the TPA on 1/11/2023 -- the funds were not actually deposited until 1/17/2023. The TPA -- when preparing the Form 5500 reported this as a late deposit. Should they have? I know it is past the Small plan Safe Harbor 7 business day rule. But the rule I thought needed be followed about 'late deposits you would place on a 5500' is the 'soon as administratively feasible, but no later than the 15th business day of the next month'. Now....I know if there was an audit the IRS is going to only consider the 'soon as administratively feasible' part of this. But....should this have been reported as a late deposit on Form 5500 (question 10a). The missed earnings was $1.31. Just want to make sure i am understanding the reporting requirements correctly. I would have said no."