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The 2020 Retirement Plan Contribution Limits

DWC 11/6/19
The IRS has released the 2020 contribution limits! Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.
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Is It Possible to Avoid an Audit for the First (Short) Year of Our Plan?

DWC 10/1/19
Facts Our company has about 200 employees, and we launched a new 401(k) plan on October of last year.  We were eager for all of our existing employees to get excited about this new benefit, so we waived the waiting period to join so that everyone would be eligible on day one.  The good news is that it worked, and we had a lot of our employees sign ...
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What is a Successor Plan and Does It Prevent Me from Starting a New 401(k) Plan?

DWC 09/10/19
Facts My company used to sponsor a 401(k) plan for my employees.  Due to an unforeseen financial hardship, we terminated the plan two years ago.  Now that we are back on solid footing, I would like to start up another 401(k) plan.  I checked with the TPA we were working with, and they said something about a possible successor plan issue.  I’m not ...
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How Do We Identify Highly Compensated Employees for the First Year Our Company Exists?

DWC 08/27/19
Facts We established our company on February 1st of this year, and now we are planning to launch our 401(k) plan.  We know there are number of tests and determinations that require us to look at company history, but as a new company, we don’t really have much of a history to look at.
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Who Are All the Providers Servicing My Plan & What Do They Do?

DWC 08/20/19
Facts I sponsor a small 401(k) plan for my employees.  Sometimes, I get confused about which service provider to go to for different plan-related questions.  Time and efficiency are important to me (and so is cost), and it seems like having all these different providers might be overkill.  Recently, I was talking to a friend who is also a business ...
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What is the Deadline to Implement a Retirement Plan for the Current Year?

DWC 08/13/19
UPDATE | This QOTW has been updated to reflect changes included in the SECURE Act, signed into law on December 20, 2019. The updated article is available here. Facts Returning from sunny days at the beach, I’ve begun discussing my company’s year-end financial projections with my accountant.  Those conversations have been about as fun as a sunburn; ...
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Is It Possible to Convert a Pre-Tax 401(k) Account to a Roth Account?

DWC 08/6/19
Facts We recently had one of the participants in our 401(k) plan ask if it is possible to convert her balance from pre-tax to Roth.  She has been a participant in our plan for many years and has both her own deferrals as well as company contributions (both match and profit sharing). Based on her current financial situation, she believes it would ...
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Can We Require Employees to be Employed at Year-End to Receive a Safe Harbor Contribution?

DWC 07/30/19
Facts Our company sponsors a safe harbor 401(k) plan.  Each participant receives a safe harbor nonelective contribution equal to 3% of his or her annual pay.  Our TPA calculates the safe harbor contribution for us after the close of each year, and we deposit it sometime before we file our company tax return for that year.  Each year, we have a ...
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How Does a Participant's Divorce Affect our 401(k) Plan?

DWC 07/23/19
Facts One of the participants in our 401(k) plan is going through a divorce, and we just received a court order directing us to provide a portion of his account to his ex-spouse.  I thought that retirement plan accounts had special protection against legal judgments.
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What Do We Need to Consider When Switching from a SIMPLE IRA to a 401(k)?

DWC 07/9/19
Facts We’ve sponsored a SIMPLE IRA for our employees for years and while it’s served its purpose, we are beginning to feel the limitations inherent in the plan.  As we begin to grow, we’d love to be able to add provisions for eligibility and to be able to reward our key performers.  I’m hesitant about making a change from this “known” commodity to ...
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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.