Unexpected Retirement Plan Disqualification
Can Trigger Serious Tax Problems
not unusual for the IRS to conduct audits of qualified
employee benefit plans, including 401(k)s.
Plan sponsors are expected to
stay in compliance with numerous, frequently changing federal
laws and regulations.
example, have you identified all employees eligible for your
401(k) plan and given them the opportunity to make deferral
employee contributions limited to the amounts allowed under
tax law for the calendar year?
your 401(k) plan pass nondiscrimination tests? Traditional
401(k) plans must be regularly tested to ensure that the
contributions don't discriminate in favor of highly
If the IRS uncovers compliance errors and the plan sponsor
doesn't fix them, the plan could be disqualified.
happens if qualified status is lost?
Tax law and administrative details that may seem trivial or
irrelevant may actually be critical to maintaining a plan's
qualified status. If a plan loses its tax-exempt status, each
participant is taxed on the value of his or her vested
benefits as of the disqualification date. That can result in
large (and completely unexpected) tax liabilities for
In addition, contributions and earnings that occur after the
disqualification date aren't tax-free. They must be included
in participants' taxable incomes. The employer's tax
deductions for plan contributions are also at risk. There are
also penalties and fees that can be devastating to a business.
Finally, withdrawals made after the disqualification date
cannot be rolled over into other tax-favored retirement plans
or accounts (such as IRAs).
The good news is that 401(k) plan errors can often be
voluntarily corrected. We can help determine if changes should
be made to your company's qualified plan to achieve and
maintain compliance. Contact us for more information. Call us at
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
that impact our clients investments and their portfolios.
We always offered our opinion and suggestions but in order to
help our clients actually execute the changes we suggest,
SMEED has created a Financial Services division.
SMEED Financial Services, Inc. will be able to
work with both individual and business clients on their
investment portfolios and manage assets on their behalf.
SMEED Financial will include Michael Uadiale,
ACA, CPA, CGMA; and Pablo Blanco who has
recently joined SMEED and comes with over 18 years of
financial sales and advising experience with affluent
Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
SMEED CPA Inc. We’ve just installed a toll-free
number that I would like for you to call and tell me how you
think we are doing as your CPA firm.
Just dial 800-609-9006
extension 3638 and follow the instructions. If we’ve
done a good job please let me know. And if we can
improve on anything, please mention that too.
Us Be Found on
Also as we expand our business,
we find more and more people are using
YELP and Google
to look for us by searching Brentwood accountant or
When they do this we want to
be FOUND on GOOGLE. One way you can help us
is to give us an
ONLINE REVIEW on our Google Maps/Places listing --->
or on our YELP local listing
click here to go to our Google Listing for SMEED CPA and
click on the
YELP link to go there.
Scroll down to the Review area.
On either site it may say: Been here?
Rate and review
You will click on the Rate and
review link and then log in, then
give us a review!
You can choose between 1 and 5
STARS and write in what you think about the tax or accounting
work we have done for you.
It's that simple. Thank
you in advance for your help and cooperation!
As always you can call our offices if you have any
questions about these or any other accounting related issues, at
Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,