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Re: Solo 401k

There might be two Forms 5500 due. Assume plan year ended 12/31, assets were at least $250k as of 12/31, and rollover occurred after 12/31. In that case one 5500 is due 7/31 for the 2014 plan year. And a final 5500 is due 8/31 for the short 2015 plan year ending this month with the rollover.
by mah001
Fri Jan 23, 2015 1:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Solo 401k
Replies: 5
Views: 672

Re: multiple 401Ks

Sounds like the original concern is to obtain a larger deduction. Look into defined benefit plans. The suggested way of getting there is flawed in assuming there is more than one employer. The form of business doesn't matter, be it sole proprietor, partnership, or corporation. If the two businesses ...
by mah001
Thu Jan 22, 2015 11:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: multiple 401Ks
Replies: 6
Views: 723

Re: multiple 401Ks

You can't do that. presumably you're the 100% owner of each business, which means the businesses are not separate for purposes of the section 415(c) limit. 415(c) limit: smaller of 100% of compensation or $52,000 per participant. If the employee also works for an unrelated employer, he/she is eligib...
by mah001
Thu Jan 22, 2015 3:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: multiple 401Ks
Replies: 6
Views: 723

Re: Can I do a Solo 401k ?

Based on jcromwell17's facts given there is an affiliated service group but not a controlled group. Therefore a plan can't be set up to benefit only one owner. The plan would need to pass coverage/nondiscrimination based on the total employee population of the LLC. See the flowcharts on page 7-45 an...
by mah001
Wed Jan 21, 2015 1:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I do a Solo 401k ?
Replies: 9
Views: 747

Re: 3-member LLC with a solo 401K?

Papito23, read your current (2014) plan, since it's the same document you're using in 2015. A plan must be a DEFINITE document that will tell you if partner number 3 is in on profit sharing. It's unlikely either Fidelity or Vanguard plans allow for shutting out partner 3, unless he/she has not met p...
by mah001
Thu Jan 08, 2015 11:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: 3-member LLC with a solo 401K?
Replies: 16
Views: 1956

Re: 3-member LLC with a solo 401K?

So you will amending and restating the same prototype plan document to show the new sponsor is XYZ LLC, as of 1/1/15. There is no need to 'close' or 'terminate' the XY Partnership plan. You should have a copy of the entire plan available to you at least online. Plans run around 100 pages in length t...
by mah001
Wed Jan 07, 2015 2:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: 3-member LLC with a solo 401K?
Replies: 16
Views: 1956

Re: 3-member LLC with a solo 401K?

I'm unaware of a statutory or regulatory definition of terms like "individual k," solo-k," et. al. These plans' "simplicity" is driven by the fact a given business has no nonhighly compensated employees who meet the statutory parameters for plan eligibility, e.g. age 21 with...
by mah001
Tue Jan 06, 2015 11:28 am
 
Forum: Personal Finance (Not Investing)
Topic: 3-member LLC with a solo 401K?
Replies: 16
Views: 1956

Re: Contributing to regular 401k and a solo 401k in same yea

It's the partnership that's the employer. It's the employer who's the sponsor of a qualified plan under IRC 401(a) and attendant regulations under 1.401...... Conclusion: Individual partner can't unilaterally set up a plan.
by mah001
Mon Dec 15, 2014 7:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Contributing to regular 401k and a solo 401k in same year
Replies: 4
Views: 277

Re: SEP IRA Eligibility

Anyone working at all during a year gets a year of service for eligibility. Remember that a year of eligibility service must be PRIOR to the current plan year. So having service in 2013 and 2014 gives you ONE year of PRIOR service. I agree service with a predecessor business of the same employer can...
by mah001
Thu Dec 11, 2014 11:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: SEP IRA Eligibility
Replies: 4
Views: 734

Re: 401K after company is sold

See Internal Revenue regulation section 1.401(k)-1(d)(4). The employer has the option to permit distribution by terminating the plan. The PROPOSED date of termination is crucial. If this date (written resolution or Board of Directors' record) is the same as or later than the date the acquiring entit...
by mah001
Thu Dec 11, 2014 10:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401K after company is sold
Replies: 2
Views: 410

Re: SEP IRA Eligibility

1. Yes 2. Assuming the plan will be based on the calendar year, requiring two years of prior service will exclude the employee who has 1 1/2 years of service. A SEP's year of service for initial eligibility is earned with any minimal amount of service. So if the employee worked only an hour in 2013 ...
by mah001
Tue Dec 09, 2014 1:39 am
 
Forum: Personal Finance (Not Investing)
Topic: SEP IRA Eligibility
Replies: 4
Views: 734

Re: Solo-401k, tax questions

So we have $73K self employment net income (line 31 of F. 1040, Sch. C for 2014) minus 3.8 percent SE tax ($2,774) = $70,226. Add back half of self employ tax ($1,387), gives $71,613. Multiply $71,613 by .2 = $14323 Maximum allowable profit-sharing (subject to section 404 25% deduction limit). Final...
by mah001
Tue Nov 18, 2014 9:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Solo-401k, tax questions
Replies: 5
Views: 816

Re: SIMPLE IRA Help for my business

It's not too late to open a SEP Ira for 2014. You could integrate it with social security if you're willing to contribute 3 percent to each eligible employee. Assuming you and spouse have been in business for the 3 years prior to 2014, you could exclude from coverage other employees without 3 years ...
by mah001
Sun Nov 16, 2014 8:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: SIMPLE IRA Help for my business
Replies: 8
Views: 880

Re: SIMPLE IRA Help for my business

SIMPLE iRA provides employer with 4 contribution options. Employer must choose one of the four (or choose zero for a year). Employer must choose one and give each employee a 60 day window for employee to elect salary deferral for that year. Employer can choose either a matching contribution or a non...
by mah001
Sat Nov 15, 2014 5:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: SIMPLE IRA Help for my business
Replies: 8
Views: 880

Re: SIMPLE IRA Help for my business

If it's correct to assume the plan hasn't been started yet, then it's too late to have a SIMPLE Ira for 2014. There was an 11/1 deadline for making your choice, signing the plan, and giving notice to employees.
by mah001
Sat Nov 15, 2014 9:17 am
 
Forum: Personal Finance (Not Investing)
Topic: SIMPLE IRA Help for my business
Replies: 8
Views: 880

Re: One Person Defined Benefit Plan

After considering ubermax and bkinder recent comments and after further review of 404(a)(7)----A typical maximum deduction scenario will be to add the DB funding requirement to the elective deferral limit of $17,500, or $23K if at least age 50 by end of year. The 6% part will yield only $15-16K, sin...
by mah001
Sat Nov 08, 2014 11:50 am
 
Forum: Personal Finance (Not Investing)
Topic: One Person Defined Benefit Plan
Replies: 67
Views: 7136

Re: One Person Defined Benefit Plan

Ok, dhodson, I might now better understand your situation. Apparently fully insured plans facilitate a larger deduction than the usual DB plan. They are exempt from the usual funding interest rate assumptions (which is what 412e says). 412(i) goes into details of what a fully insured plan is. They c...
by mah001
Thu Nov 06, 2014 1:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: One Person Defined Benefit Plan
Replies: 67
Views: 7136

Re: Maximum deferred compensation?

Grt2b: The example of "Joe Saver" has to do with the elective deferral limit, which is $17,500 across all plans. It's increased by $5,500 if age 50 or more. But the "overall limit" of $52,000 is per unrelated employer. OP's facts state the day job $52,000 is all employER ctbns., ...
by mah001
Thu Nov 06, 2014 9:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Maximum deferred compensation?
Replies: 8
Views: 880

Re: Maximum deferred compensation?

The $52k limit for defined ctbn. plans such as 401k is $52k per unrelated plan. My previous answer overstated the elective deferral limit for people under age 50 by $5,000. So assuming no elective deferrals were made to the main employer's plan and $50k of self employment net income, the second plan...
by mah001
Wed Nov 05, 2014 11:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Maximum deferred compensation?
Replies: 8
Views: 880

Re: Maximum deferred compensation?

$32,355 is the deferrable amount for a 401(k) plan. Assumes the 2-3 employments are unrelated under section 414 and no employEE elective deferrals have been made. The employee elective deferral limit is the aggregate of all plans, even when the employers aren't related. Calculation: ($50,000 self em...
by mah001
Wed Nov 05, 2014 6:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Maximum deferred compensation?
Replies: 8
Views: 880

Re: One Person Defined Benefit Plan

The main subject of section 412 is funding, not insurance, the latter being covered at 412e) and 412(i). I was not at all recommending insurance as an investment of the plan, nor am I completely dismissing it. Section 412 funding rules lead to section 404(a) deductible amount.
by mah001
Wed Nov 05, 2014 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: One Person Defined Benefit Plan
Replies: 67
Views: 7136

Re: One Person Defined Benefit Plan

See IRS Alert Guidelines, Worksheet #2A and Explanation 2A for ways to accrue a defined benefit. Parts VII and VIII look particularly relevant, as fully insured plans (412i) are discussed. See IRS Alert Guidelines, Worksheet and Explanation #6 for benefit limitations under subsection 415(b). It shou...
by mah001
Wed Nov 05, 2014 8:37 am
 
Forum: Personal Finance (Not Investing)
Topic: One Person Defined Benefit Plan
Replies: 67
Views: 7136

Re: SEP IRA for Sole Propietorship + Simple IRA at W2 employ

spangler: I confirm by much the same logic the last sentence of your original post. LeeMKE is correct in that you can have SIMPLE Ira and 401(k) simultaneously........but not at a related employer. SIMPLE Ira uses an exclusive plan rule = the SIMPLE Ira is the only plan allowable for a given year at...
by mah001
Thu Oct 30, 2014 7:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: SEP IRA for Sole Propietorship + Simple IRA at W2 employer
Replies: 11
Views: 582

Re: Solo 401k - S Corp with Business Partners (Non-Spouse)

The one plan scenario is likely a better way to go. E-trade's answer might pose problems from the get-go. It depends on how the plan is worded. E-trade's plan would need to somehow exclude the other 2 partners, a twist I would not expect to be covered by these supposedly simpler plans. Additionally ...
by mah001
Sat Sep 27, 2014 5:37 am
 
Forum: Personal Finance (Not Investing)
Topic: Solo 401k - S Corp with Business Partners (Non-Spouse)
Replies: 6
Views: 550

Re: Opening Solo 401(k) and Closing SEP-IRA

greetings from oxford england.....I still think you can start the 401k this year. I don't believe the 5305-sep uses the word "active" but merely says you cannot currently maintain another plan other than another sep. And I don't think "maintain" is defined anywhere....OK, the pro...
by mah001
Tue Sep 16, 2014 2:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Opening Solo 401(k) and Closing SEP-IRA
Replies: 10
Views: 932

Re: Opening Solo 401(k) and Closing SEP-IRA

You can open a solo-k for 2014. The active participant rule does not affect this; it has to do only with IRA deductibility.
by mah001
Mon Sep 15, 2014 4:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Opening Solo 401(k) and Closing SEP-IRA
Replies: 10
Views: 932

Re: Help Please: Retirement plan vs. Higher Salary

I too wonder at this unusual setup but do not necessarily question the legality. By making the election irrevocable, employer avoids creating a CODA (cash or deferred arrangement, like a 401(k)). Perhaps staff people are covered, or maybe their services are via a PEO that provides the requisite reti...
by mah001
Tue Sep 02, 2014 11:42 am
 
Forum: Personal Finance (Not Investing)
Topic: Help Please: Retirement plan vs. Higher Salary
Replies: 35
Views: 3726

Re: Convincing an employer to offer after-tax 403b and more.

See TD 9340 (Tax Document), effective 7/26/07. This is the newer set of final regulations under section 1.403(b). There are a few pages of preliminary discussion, followed by the numbered regs, 1.403(b)-1, 1.403(b)-2 etc., each of which deals with a different 403(b) topic. The preliminary discussion...
by mah001
Sat Aug 30, 2014 11:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Convincing an employer to offer after-tax 403b and more...
Replies: 32
Views: 1406

Re: Does your employer still offer pensions to new hires?

I've heard that Form 5500 data is more readily available these days. Try freeerisa.com or the EBSA to look at employer filings for their plans, including defined benefit. Unsure of search parameters from there, for example can you search as simply as "ABC Co. Defined Benefit Plan?" See For...
by mah001
Sat Aug 30, 2014 11:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Does your employer still offer pensions to new hires?
Replies: 54
Views: 4098

Re: Wiki revised - Employer Retirement Plan Overview

Payroll reduction IRAs aren't very common. Defined Benefit Plan text final sentence is confusing if the context is to compare DC vs. DB. In a DB plan, more precison (definition) occurs for the plan's output, aka the benefit. Less precision is available to the employer concerning the input, aka the c...
by mah001
Thu Aug 28, 2014 9:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Wiki revised - Employer Retirement Plan Overview
Replies: 6
Views: 835

Re: Help - my IRA got distributed without my instructions

Default withholding for a taxable IRA distribution is 10%. Distributee can make the % less (such as 0%) or more by filling out form W-4P before the distribution. Default withholding for a 401 and likely 403(b) taxable nonrolled distribution is 20%. Distributee can use form w-4p if she wishes to incr...
by mah001
Sat Aug 23, 2014 7:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help - my IRA got distributed without my instructions
Replies: 9
Views: 1121

Re: Self Employment, 401K and Backdoor Roth: A Viable Gamepl

A solo-k equivalent that allows for after tax employee contributions sounds doable to me. If the boilerplates (master and prototype, volume submitter) don't yet offer it, there's still an "individually designed plan." Such a plan might be referred to as individually designed by adding the ...
by mah001
Mon Aug 18, 2014 9:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Self Employment, 401K and Backdoor Roth: A Viable Gameplan?
Replies: 10
Views: 4207

Re: Automatic monthly SIMPLE IRA to Traditonal IRA transfer?

I would stay away from the word rollover and stick with trustee to trustee transfer. This type of transaction is 'non reportable;' American Funds isn't required to prepare any 1099-R forms. You, the Ira owner, never personally had possession of the funds. Document it as much as you can on your end, ...
by mah001
Sat Aug 16, 2014 11:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Automatic monthly SIMPLE IRA to Traditonal IRA transfer?
Replies: 6
Views: 529

Re: Can I open a Solo 401k plan with no income?

Extremely unlikely for a custodian to work up a sweat over incoming rollovers. Looking at Rev. Rul. 2014-9, situation 2, the administrator of the 401(k) plan (for a small plan this is often the employer) is implicitly or otherwise asserting it's a valid incoming rollover.
by mah001
Wed Aug 13, 2014 3:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Can I open a Solo 401k plan with no income?
Replies: 15
Views: 1506

Re: Can I open a Solo 401k plan with no income?

Even when a plan is disqualified, the bark occasionally is worse than the bite. IRS consequences of a DQ: no employer or employee deduction for contributions; the plan funds become a taxable trust; any rollovers done during the DQ period are invalid rollovers. If these results are bearable in a give...
by mah001
Wed Aug 13, 2014 12:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Can I open a Solo 401k plan with no income?
Replies: 15
Views: 1506

Re: Establishing a SEP - what about terminated employees?

SEP compensation is defined "...for the year." The permissible plan year ends are either 12/31 or the employer tax year end. Having a plan, followed by changing the plan year, results in a short plan year. If one wants to prorate, when for example a plan sponsoring business comes to an end...
by mah001
Thu Aug 07, 2014 1:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Establishing a SEP - what about terminated employees?
Replies: 19
Views: 999

Re: Establishing a SEP - what about terminated employees?

The code says the plan year can be the calendar year or can coincide with employer's tax year, if it is not the calendar year. I don't see anything about a short plan year except for the case where employer's tax year changes and plan already exists. SIMPLE Ira can be operated for 2014, with some co...
by mah001
Wed Aug 06, 2014 8:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Establishing a SEP - what about terminated employees?
Replies: 19
Views: 999

Re: Possible Rollover IRA after company purchased

As of a few years ago, all 403(b) plans, including governments and probably churches, must have a written plan. Look there first. Compare to regulations under section 1.403(b) from 2007 to see what's permissible. The very concept of plan termination for a 403(b) is new in the regs. If we're trending...
by mah001
Sun Aug 03, 2014 6:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Possible Rollover IRA after company purchased
Replies: 5
Views: 288

Re: Your 401k, u die, must beneficiary withdraw within 5 yea

As for the plan provision, I don't have top of head knowledge of its required adoption deadline; there might not be an amendment required for this unless it's actually possible in the plan. Effective in the plan's operation for plan years beginning in 2010.
by mah001
Thu Jul 31, 2014 2:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Your 401k, u die, must beneficiary withdraw within 5 years?
Replies: 20
Views: 2123

Re: Safe Harbor 401(k)

For the safe harbor notice specs, see Worksheet #12, Item X. h. and the attached Publication 7335 (Explanation #12), item X. h.

Note that CPA audit requirement comes from ERISA (DOL). In IRS eyes, any 5500 lacking only an audit is a complete filing.
by mah001
Thu Jul 31, 2014 10:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Safe Harbor 401(k)
Replies: 15
Views: 1099

Re: Safe Harbor 401(k)

It used to be and seems it continues to be that some plans don't provide the investment detail you seek. If a plan has more than 100 participants, a CPA audit report on the plan must be attached to the 5500. But if plan has less than 100 and plan offers a 'diversified' investment menu of at least 3 ...
by mah001
Thu Jul 31, 2014 8:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Safe Harbor 401(k)
Replies: 15
Views: 1099

Re: Your 401k, u die, must beneficiary withdraw within 5 yea

Looks like we're saying the 5 year rule does allow for rolling/stretching if distributee timely acts.
by mah001
Wed Jul 30, 2014 9:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Your 401k, u die, must beneficiary withdraw within 5 years?
Replies: 20
Views: 2123

Re: Your 401k, u die, must beneficiary withdraw within 5 yea

Plan must meet 401(a)(9) ---provide plan provision and then follow it. If plan's method is faster than it needed to be and beneficiary is taxed sooner than would have been possible, the plan is under no obligation to act differently. But if plan's distribution options include dollars that are not rm...
by mah001
Wed Jul 30, 2014 8:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Your 401k, u die, must beneficiary withdraw within 5 years?
Replies: 20
Views: 2123

Re: Your 401k, u die, must beneficiary withdraw within 5 yea

Try pub 6392, item II. e. for the rollover part.
Try pub 7004, item II b. for the rmd part.
There are cites, e.g. code and regs.
Gotta go to Broncos' practice.
by mah001
Wed Jul 30, 2014 7:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Your 401k, u die, must beneficiary withdraw within 5 years?
Replies: 20
Views: 2123

Re: state pension

Congressional Research Service says for those retiring in 2013, maximum PIA elimination is $395.50/mo. Not as much as I was guessing but likely increasing every year and worth understanding.
by mah001
Mon Jul 28, 2014 8:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2786

Re: state pension

My point is that OP very possibly has little to no social security credit. He not only needs to check w-2 but to understand how government pension could impact an undisputedly real concept called PIA.
by mah001
Mon Jul 28, 2014 7:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2786

Re: state pension

Public Law 98-21, title of section 113 contains ".....elimination of windfall.."
I did not think OP had been a fed. But until OP says otherwise, WEP can significantly impact him/her and should be considered.
by mah001
Mon Jul 28, 2014 7:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2786

Re: state pension

What if OP does not wind up with 30 years of ss coverage? WEP might apply and put a big dent in the expected benefit. Everybody quotes pubs like they're gospel. if for no other reason pub 963 is extremely helpful near its beginning.......something to the effect that you can't use pubs to support you...
by mah001
Mon Jul 28, 2014 6:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2786

Re: state pension

OP didn't say anything about working for feds. But let's say for grins the social security benefit due to OP will be reduced by $500 because of wep. Call me crazy; I'd want to know that as an aid to my retirement planning.
by mah001
Mon Jul 28, 2014 5:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2786
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