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Re: SEP-IRA employer contributions fr/ personal account-prob

Alan for President. He can talk the talk and never makes a mistake.
by mah001
Tue Jul 22, 2014 10:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 15
Views: 749

Re: SEP-IRA employer contributions fr/ personal account-prob

Alan, given what you know about me, your diss constitutes a debunk. So now you speak for the real world. Had you read OP's entire post, the PT is still in the planning stage. I'm not addressing what OP should do, other than don't do a PT.
by mah001
Tue Jul 22, 2014 9:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 15
Views: 749

Re: SEP-IRA employer contributions fr/ personal account-prob

Jared and Alan obviously did not look up examples of indirect prohibited transactions. Why don't you do that before debunking my take on it? The interpretation of indirect loan is fairly strict. For starters, the SUBSTANCE of the CPA's idea still leaves the principal involved in a loan with the plan...
by mah001
Tue Jul 22, 2014 7:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 15
Views: 749

Re: SEP-IRA employer contributions fr/ personal account-prob

If corp tax return had a valid extension of time to file, then 2013 can still be fixed. Other than that, I don't see how to overcome IRC section 408(k)(3)(A), which has the employer (sponsor of plan) as the one who makes the contribution. The prior year contributions are nondeductible under 404(h)(1...
by mah001
Tue Jul 22, 2014 12:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 15
Views: 749

Re: SEP-IRA employer contributions fr/ personal account-prob

IRC 4975(c)(1)(B): ".....the term prohibited transaction means .....lending of money or other extension of credit........between a plan and a disqualified person." The disqualified person here is the S corp (or brian2013, not sure which way to go), who has been deemed to be in a loan relat...
by mah001
Tue Jul 22, 2014 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 15
Views: 749

Re: Multiple Solo 401(k)s?

I agree it can't be done using facts given. But it could have been done if: the plan allows for investment in real estate; the plan purchased the condo from an unrelated party (arm's length transaction); the rental is passive and unrelated (avoid too much activeness, e.g. too much self fixing it up ...
by mah001
Tue Jul 22, 2014 10:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Multiple Solo 401(k)s?
Replies: 4
Views: 376

Re: SEP-IRA employer contributions fr/ personal account-prob

The CPA must be unaware of the concept 'indirect prohibited transaction,' which would make the entire ira immediately taxable. The good news is there would be no excise tax on the prohibited transaction.
by mah001
Mon Jul 21, 2014 10:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA employer contributions fr/ personal account-problem?
Replies: 15
Views: 749

Re: Should I open a solo 401k?

Retirement plan assets in IRA type accounts are shielded from creditors according to state law. Assets in a 401(a) account are shielded by federal 'exclusive benefit' rule of IRC section 401(a)(2) and 'nonalienation or assignment' under 401(a)(12). At least one of those clauses is explained in the I...
by mah001
Mon Jul 21, 2014 9:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I open a solo 401k?
Replies: 9
Views: 658

Re: Help with setting up Fidelity solo-401k

Don't know, but it's got to be better than 'created a pension plan.'
by mah001
Sat Jul 19, 2014 9:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with setting up Fidelity solo-401k
Replies: 14
Views: 654

Re: 401(a) and 401(k) and contribution limits

I agree with Duckie in that the old plan has no effect on the new but disagree on the why. The old is probably not a money purchase plan. Money purchase plans, where they still exist, are typically all employer contributed dollars with nothing from the employee. Congress defined elective deferrals a...
by mah001
Fri Jul 18, 2014 8:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(a) and 401(k) and contribution limits
Replies: 7
Views: 420

Re: 401(a) and 401(k) and contribution limits

Hate to disagree with Dutch, but the 401(a) likely does not affect the 403(b). Assume the new employment is not akin to a transfer, e.g. it's not a related state university/part of the same system. The old plan may have been a 414(h) 'pickup plan,' be it defined contribution or defined benefit. The ...
by mah001
Fri Jul 18, 2014 7:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(a) and 401(k) and contribution limits
Replies: 7
Views: 420

Re: Help with setting up Fidelity solo-401k

4. Don't need wife's name for affiliated employers, if there are none. That is, she's not doing business via another sole proprietorship, partnership, or corporation that is part of a controlled group and/or affiliated service group relationship with the employer (sole prop.) who's adopting the plan...
by mah001
Fri Jul 18, 2014 7:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with setting up Fidelity solo-401k
Replies: 14
Views: 654

Re: Small business 401k blues

Check the money purchase plan and trust documents. I'd think the plan would be able to buy annuities for your late partner's heirs. You should be able to do this regardless of whether the old plan terminates. If current custodian says it can't be done, that's another indicator it's time to switch pr...
by mah001
Wed Jul 16, 2014 10:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Small business 401k blues
Replies: 6
Views: 566

Re: Hardship Withdrawal From 401K/Profit Sharing

You said there's a 'nonelective safe harbor' contribution. Unless there's a mistake in terminology, that means the participant gets at least 3% of pay from the employer. Employee contribution is not required. Now there could be additional matching based on deferrals, which would be lost. Profit shar...
by mah001
Sat Jul 12, 2014 9:04 pm
 
Forum: Investing - Theory, News & General
Topic: Hardship Withdrawal From 401K/Profit Sharing
Replies: 12
Views: 1603

Re: Money Purchase to 401k

You should be aware of 2 main ways to proceed, when leaving MPPP for 401(k). That is, will the MPPP be terminated? If yes, every participant will have a chance to access his/her funds and can roll/transfer it to an Ira or to the new qualified plan or can spend it/use it to go work somewhere else. If...
by mah001
Sat Jul 12, 2014 6:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Money Purchase to 401k
Replies: 5
Views: 719

Re: Hardship Withdrawal From 401K/Profit Sharing

I agree a loan is better if it's feasible. Part of hardship requirements is to consider a possible loan first, unless doing so increases the hardship. I've never heard of a plan requiring a 6 month suspension of elective deferrals following a loan, but it's a requirement following a hardship distrib...
by mah001
Sat Jul 12, 2014 5:02 pm
 
Forum: Investing - Theory, News & General
Topic: Hardship Withdrawal From 401K/Profit Sharing
Replies: 12
Views: 1603

Re: Hardship Withdrawal From 401K/Profit Sharing

Suspending deferrals for at least 6 months is currently an IRS requirement. See Publication 7335, last paragragh of item VII b.
by mah001
Fri Jul 11, 2014 9:30 am
 
Forum: Investing - Theory, News & General
Topic: Hardship Withdrawal From 401K/Profit Sharing
Replies: 12
Views: 1603

Re: Inservice distribution 403b

"that" refers to what you said.
by mah001
Thu Jul 10, 2014 5:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inservice distribution 403b
Replies: 14
Views: 481

Re: Inservice distribution 403b

Retiredjg, that's pretty much what the IRS regulation section 1.403(b)-6 says---- except pre 1/1/89 elective deferrals aren't tied to 59 1/2 except a participant can get a sooner distribution if he dies, is disabled, has a hardship, or has a severance of employment. See in particular 1.403(b)-6(d), ...
by mah001
Thu Jul 10, 2014 5:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inservice distribution 403b
Replies: 14
Views: 481

Re: Is my SIMPLE IRA charging a reasonable fee?

I find that reading the Internal Revenue Bulletin 3 column version of things somehow makes these IRS pronouncements easier to take in. On page 32, at Q and A J-1 it says that not only can you do a transfer but the transfer must be done "without cost" to the employee. See Example 1 of q and...
by mah001
Wed Jul 09, 2014 7:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Is my SIMPLE IRA charging a reasonable fee?
Replies: 15
Views: 1192

Re: Is my SIMPLE IRA charging a reasonable fee?

Vanguard's description for 'participant' is misleading. Simple Ira statute is at IRC section 408(p). 408(p)(4) speaks of employees eligible to participate, which include the owner/employee and others. The first sentence of 408(p) says a SIMPLE Ira is an individual retirement plan. This means the emp...
by mah001
Tue Jul 08, 2014 9:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is my SIMPLE IRA charging a reasonable fee?
Replies: 15
Views: 1192

Re: Is my SIMPLE IRA charging a reasonable fee?

You can open a different SIMPLE Ira account anytime and do a transfer anytime. See Notice 98-4, question and answer I-3 and I-4.
by mah001
Tue Jul 08, 2014 7:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is my SIMPLE IRA charging a reasonable fee?
Replies: 15
Views: 1192

Re: rmds [Required Minimum Distributions]

As alluded to by a couple of people above, the employer can be the biggest wild card in your timing plans. Hopefully they will be forthcoming and accommodating in telling you what to expect as far as the time frame and manner of distributions. Distributions may be fairly quick in general, but there ...
by mah001
Mon Jul 07, 2014 4:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: rmds [Required Minimum Distributions]
Replies: 10
Views: 1141

Re: Re-hired at firm, given incorrect 401k info

Cursory reading of the pertinent parts of Revenue Procedure 2013-12 (the 176 page IRS drop file version) suggests that you are due 50% of the Average Deferral Percentage for your group for half the plan year, your group being highly compensated or non highly compensated. Presumably all employees con...
by mah001
Thu Jul 03, 2014 7:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Re-hired at firm, given incorrect 401k info
Replies: 27
Views: 2284

Re: Re-hired at firm, given incorrect 401k info

The SUmmary Plan Description won't have the details covering re-entry into the plan. You might try to frame the situation something like this: We're all in this together trying to follow these complicated rules. The plan probably qualifies for self correction under Rev. Proc. 2013-12. Is self correc...
by mah001
Tue Jul 01, 2014 8:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Re-hired at firm, given incorrect 401k info
Replies: 27
Views: 2284

Re: Solo 401 K questions

In order to contribute a total of $104K, you need either to open a defined benefit plan or pay at least $276K total salary for you + your wife together. Check: $276K @25% maximum = $69,000................plus $35,000 elective deferrals equals $104,000.
by mah001
Sun Jun 29, 2014 11:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Solo 401 K questions
Replies: 11
Views: 890

Re: Profit Sharing 401k AND an Individual 401k?

You're limited to $17,500 Roth-k in either case. In the solo-k can do the employer ctbn. on an after tax basis, if the plan allows. If your job #1 plan situation is flexible enough to still designate the ctbns. to line up that way, go for it. On the other hand I'd be disinclined to pursue it if the ...
by mah001
Tue Jun 24, 2014 10:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Profit Sharing 401k AND an Individual 401k?
Replies: 13
Views: 495

Re: Profit Sharing 401k AND an Individual 401k?

Kaptan, Doc could still have elective deferral space left if earned $208K on w-2 or equivalent self employment from first employment/other job @ 25% (or possible but improbable more than 25%) profit-sharing contribution; i.e. $52,000 profit-sharing at other job. In other words all of that person's $...
by mah001
Tue Jun 24, 2014 9:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Profit Sharing 401k AND an Individual 401k?
Replies: 13
Views: 495

Re: Profit Sharing 401k AND an Individual 401k?

Based on facts given, it sounds like you're good to go on the 20%. The $52,000 limit is per unrelated employer. Unrelated means the two businesses do not comprise a controlled group or an affiliated service group. Controlled group, IRC sec. 414(b) and (c) requires 80% or more ownership in common by ...
by mah001
Tue Jun 24, 2014 9:32 am
 
Forum: Personal Finance (Not Investing)
Topic: Profit Sharing 401k AND an Individual 401k?
Replies: 13
Views: 495

Re: SEP and Sole Proprietor Max Compensation

Ballparking $318K less about $12,000 that's half the SE tax less $51K for the contribution itself yields about $255K, the 2013 compensation limit under 401(a)(17). Also see IRC section 401(c)(2)(A)(v) ----self employment income accounts for contributions deducted under section 404-------and 401(c)(2...
by mah001
Mon Jun 23, 2014 5:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: SEP and Sole Proprietor Max Compensation
Replies: 13
Views: 732

Re: SEP and Sole Proprietor Max Compensation

re: "....thinking of starting one next year."

Is that one a c-corp or a DB plan?
by mah001
Mon Jun 23, 2014 9:01 am
 
Forum: Personal Finance (Not Investing)
Topic: SEP and Sole Proprietor Max Compensation
Replies: 13
Views: 732

Re: SEP and Sole Proprietor Max Compensation

You need to remember the $255,000 for a self employed person is the remainder of your Schedule C line 31 net income after you've subtracted half the SE tax and the SEP contribution itself, the $51,000. So you actually need around $266,000 on line 31 to max the SEP. A person making about $266,000 wil...
by mah001
Sun Jun 22, 2014 9:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: SEP and Sole Proprietor Max Compensation
Replies: 13
Views: 732

Re: EmergDoc's link, #6: 2nd that emotion

The 10% "additional income tax" under IRC sec. 72(t) has hit many people like a bolt from the blue. The rules can become complex quickly, with IRA type accounts offering different exemptions compared to "qualified plans." Many people could have avoided being subject to the penalt...
by mah001
Tue Jun 17, 2014 12:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early retirement gotchas
Replies: 28
Views: 5361

Re: IRC paragraph 411(a)(11)

says the plan participant must consent to a distribution that's more than $5,000. See Alert Guidelines Explanation #4, Item IIe. I agree with what's been said and would add that you should obtain an entire copy of the plan. Basically, you have the right to keep it there until required minimum distri...
by mah001
Sat Jun 14, 2014 6:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time limit on 401k Rollover?
Replies: 5
Views: 289

Re: Retirement Planning Questions

Be aware whether your defined benefit plan is integrated with social security. This concept is also known as permitted disparity and it enables employer to reduce or offset the plan benefit by accounting for employee's social security benefit. See for example IRS db lrm on permitted disparity and co...
by mah001
Wed Jun 11, 2014 8:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement Planning Questions
Replies: 16
Views: 2193

Re: Complicated 401(k) question

The $17,500 are not valid deferrals, which must be taken from the paycheck of the employee of the plan sponsor. That's a basic spec found at the beginning of IRC subsection 401(k) and 401(a).
by mah001
Mon Jun 09, 2014 11:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Complicated 401(k) question
Replies: 11
Views: 1342

Re: Pension terminated - lump sum or 'Cash installment Payme

Is the plan a pension in the ERISA sense or in the IRC sense? Under ERISA all retirement plans are called pensions. Under IRS regulatory definition, pensions include only defined benefit plans including cash balance, plus money purchase plans. A 401(k) is not a pension, and if it does not offer a li...
by mah001
Sun Jun 08, 2014 9:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pension terminated - lump sum or 'Cash installment Payment'?
Replies: 5
Views: 1136

Re: Complicated 401(k) question

Read the plan document, or at least the summary plan description to determine which entity is the 401k plan sponsor, your s-corp or the clinic. The plan document will also tell you about vesting. In any event, you wearing employee hat should not be sending any pretax contributions from your personal...
by mah001
Sun Jun 08, 2014 7:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Complicated 401(k) question
Replies: 11
Views: 1342

Re: Taking distributions from my 401k

All of the above is another reason to read your legal plan document instead of the summary plan description. Don't rely on customer service reps, who typically don't know which plan options your employer uses. The plan document often includes the trust provisions, which obviously deal with the plan ...
by mah001
Sun Jun 08, 2014 12:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taking distributions from my 401k
Replies: 20
Views: 1049

Re: Notice 98-4, Q & A #I-2 thru I-5

covers this area. I see that it additionally clarifies the 2 years starts running when the employer first deposits a contribution to the SIMPLE Ira account. To become an expert on simple iras, read all of Notice 98-4.
by mah001
Sat Jun 07, 2014 10:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth and SIMPLE IRA two year rule?
Replies: 10
Views: 553

Re: Mention IRC paragraph 408(d)(4) in your letter.

It says that contrary to general rule in 408(d)(1) saying IRA distributions are taxable, your distribution is not taxable since it's met the 3 conditions: was withdrawn by return due date, was accompanied by income (none), and has not been deducted on the (amended) tax return. Custodians typically d...
by mah001
Sat May 31, 2014 3:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS saying timely excess IRA removal is taxable.
Replies: 31
Views: 2423

Re: Immaterial amt. not worth it.

Profit-sharing works with the employer (not the employee) contributing to the plan. The amount contributed is divided according to the plan's allocation formula. Certain non-vanilla profit-sharing allocation formulas can yield 75% or more of the ctbn going to the HCEs. If even one NHCE is eligible, ...
by mah001
Thu May 29, 2014 5:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please explain 401k profit sharing plan options
Replies: 2
Views: 320

Re: 401(k) + roth 401(k) + 25% profit-sharing space

is available in all plans that have roth (k). Just spent a half hour reading IRS website on retirement plans. There's a list of preapproved plans that were approved for EGTRRA law. For Vanguard Fiduciary Trust Co. in PA there are about 5 plans that have the word CODA (cash or deferred arrangement) i...
by mah001
Mon May 26, 2014 10:20 am
 
Forum: Personal Finance (Not Investing)
Topic: Solo Roth 401(k) + Keogh
Replies: 26
Views: 1235

Re: Solo Roth 401(k) + Keogh

The two year rule is for an ongoing plan. You can't distribute employer contributed funds or roll them over until those dollars have been in the plan for 2 years, assuming a plan even allows for this. But there's no problem with the current situation. It sounds like you want to 'restate' the Fidelit...
by mah001
Fri May 23, 2014 10:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Solo Roth 401(k) + Keogh
Replies: 26
Views: 1235

Re: Gave two weeks notice a week ago - benefits wrapup quest

If anyone has a COBRA issue, see if you can use IRC section 4980B as leverage.......$100/day penalty for failure of 'group health plan' to meet the requirements of 4980B(f).
by mah001
Mon May 19, 2014 8:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Gave two weeks notice a week ago - benefits wrapup questions
Replies: 22
Views: 3548

Multiple Plans are fine under the Code & Regs,

but is it ok with YOUR plans? OP, the 25% EMPLOYER deduction limit and the $23,000 employee elective deferral limit for age 50+ (whether Roth-K or regular K) can be divided up as you like among as many plans as you have. If adopting a new plan, make it effective back to January 1 so that your entire...
by mah001
Mon May 19, 2014 5:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Solo Roth 401(k) + Keogh
Replies: 26
Views: 1235

Re: [Help with calculating] solo 401k contributions

The $14,869 profit- sharing employer contribution limit is your answer. There are several sets of rules which must be met simultaneously. These include the employer's deduction limit--for you it's $14,869. There's the individual employee elective deferral limit; that's the $17,500 limit using the su...
by mah001
Mon May 12, 2014 9:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Help with calculating] solo 401k contributions
Replies: 10
Views: 587

Re: [Help with calculating] solo 401k contributions

Section 415(k) says a 403(b) IS a plan that's related to (any solo-k). So the combination of plans for the respective 2014 'limitation year' of each plan must meet the 415(c) limit, the smaller of 100% of 'includable compensation' or $52,000. Using OP's data, there doesn't look to be any chance of a...
by mah001
Mon May 12, 2014 7:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Help with calculating] solo 401k contributions
Replies: 10
Views: 587

Re: Flexible spending Account Question - Changed Jobs

Notice 2012-40 says you can do another $2,500 if the two employers aren't related.
by mah001
Thu May 01, 2014 9:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Flexible spending Account Question - Changed Jobs
Replies: 2
Views: 282

Re: Solo 401(k) if other employer has 401(k)?

Make sure there's no affiliated service group. See Alert Guidelines, Worksheet and Explanation No. 10. If an affiliated service group exists, then coverage and nondiscrimination specs will have to be met by both 401(k) plans.
by mah001
Thu May 01, 2014 11:20 am
 
Forum: Personal Finance (Not Investing)
Topic: Solo 401(k) if other employer has 401(k)?
Replies: 4
Views: 344
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