Federal Tax question


I

irfanballard

Federal Tax question
***************************************

In 2008, I decided to consolidate my retirement accounts.

I transferred all my mutual funds from my Keogh Account to my SEP IRA
in 2008. Both accounts are at Schwab. I have not contributed to my
Keogh account for quite a few years. I did contribute to my SEP IRA in
2008.

Do I need to inform the IRS re: the closure of the Keogh account?
If so, what forms should I use ?

Would you please let me know.

Thanks,

Irfan Ballard
 
Ad

Advertisements

S

Steve Pope

Federal Tax question
***************************************
In 2008, I decided to consolidate my retirement accounts.
I transferred all my mutual funds from my Keogh Account to my SEP IRA
in 2008. Both accounts are at Schwab. I have not contributed to my
Keogh account for quite a few years. I did contribute to my SEP IRA in
2008.
Do I need to inform the IRS re: the closure of the Keogh account?
If so, what forms should I use ?
Would you please let me know.
You almost certainly want to consult with a retirement plan
specialist on this one.

The simplest possibility is that you have to file form
5500-EZ for the Keogh stating that 2008 its the final plan
year. Starting this year, this form must be electronically
filed and you will probably need a tax person to do this
for you even if they are doing nothing else.

5500-EZ is not filed with the IRS, but with the EBSA.

The above is a bare minimum of information. You really
need advice from a specialist, because small mistakes in dealing
with qualified plans can become very expensive.

Steve (not a tax professional)
 
R

Russ in San Diego

You almost certainly want to consult with a retirement plan
specialist on this one.  

The simplest possibility is that you have to file form
5500-EZ for the Keogh stating that 2008 its the final plan
year.  Starting this year, this form must be electronically
filed and you will probably need a tax person to do this
for you even if they are doing nothing else.

5500-EZ is not filed with the IRS, but with the EBSA.

The above is a bare minimum of information.  You really
need advice from a specialist, because small mistakes in dealing
with qualified plans can become very expensive.

Steve (not a tax professional)
There might also be an issue if your Keogh included a Profit Sharing
plan. If you had profits during any of the years in which you failed
to contribute, you may have been required to make contributions to the
PSP at the rate declared when you established the plan.

I'm also not a tax pro -- but I'm trying to figure out how to move MY
Keogh over to my individual 401k. Until I get that totally nailed
down, I'm putting the "employee contribution" into my 401k and the
profit sharing/money purchase into the Keogh.
 
Ad

Advertisements

S

Steve Pope

Russ in San Diego said:
On Jan 6, 11:16 pm, (e-mail address removed) (Steve Pope) wrote:
[Parallel Keogh and Simple-IRA plans]
There might also be an issue if your Keogh included a Profit Sharing
plan. If you had profits during any of the years in which you failed
to contribute, you may have been required to make contributions to the
PSP at the rate declared when you established the plan.
Yes, that occured to me also when reading OP's post. I would
be especially worried if the plans covered the same business
activity, less so if they covered entirely different businesses.
I'm also not a tax pro -- but I'm trying to figure out how to move MY
Keogh over to my individual 401k. Until I get that totally nailed
down, I'm putting the "employee contribution" into my 401k and the
profit sharing/money purchase into the Keogh.
That's the smart thing to do at the moment, in my opinion.

But what you ideally should have done is re-stated the Keogh as
a solo 401(k). Providers of these master plans (i.e. brokerages)
have a routine path for doing this. In this scenario the "plan"
stays the same (same EIN and sequence number) but the plan
documents change. Having not done this, you may now have to merge
the plans. Again a job for an expert.


Steve (not a tax professional)
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top