Q.
Who can use PLAN4ONE?
A.
PLAN4ONE is designed specifically for businesses that either do not employ any common law
employees or that employ only common-law employees who may be disregarded for purposes of
federal qualified plan coverage requirements. Generally, any business or enterprise that employs only
the owner(s) and/or spouse(s) of the owner(s) can utilize the PLAN4ONE. These businesses include:
Q.
What if I have ownership in more than one business?
A.
You may have to include all businesses under one business retirement plan (depending on whether the
business constitutes a "controlled group,” as defined under section 414 of the Internal Revenue Code).
Q.
What are the contribution limits?
A.
Plan contributions cannot exceed the lesser of $46,000 or 100% of compensation. Employee deferrals
are limited to $15,500 (employees age 50 and over can contribute an additional $5,000).¹ The employer
contribution limit is 25% of compensation.¹
Q.
Are rollover contributions allowed?
A.
Yes, rollovers and transfers are allowed from most other tax-deferred retirement plans, including
Keoghs, defined benefit plans, deductible and conduit IRAs, SEPs, 401(k)s, profit sharing and money purchase plans, SIMPLE IRAs after two years of SIMPLE participation and 403(b) and governmental
457 plans.
Q.
What is the deadline for funding a PLAN4ONE?
A.
The deadline for funding the profit sharing portion is the business's tax return due date, including
extensions. The deadline for depositing employee salary deferrals depends on whether or not the
business is incorporated.
Q.
What is the deadline for an employee salary deferral election?
A.
Owners of an unincorporated business (i.e., sole proprietor or partner) must generally make a written
employee salary deferral election (including amount) by no later than the last day of their tax year. If a
business is incorporated, it must generally make a written employee salary deferral election (including
amount) before the compensation is currently available or paid.
Q.
Can personal loans be taken against the PLAN4ONE?
A.
Yes, incorporated and unincorporated business owners are eligible to take personal loans from
qualified plans.
Q.
What types of employees can generally be excluded from the PLAN4ONE?
A.
Generally, under federal law you are permitted to exclude the following types of employees from
coverage under a 401(k) plan, such as the PLAN4ONE:
- Employees under age 21
- Employees with less than one year of service
- Employees who work less than 1,000 hours per year
- Certain union employees
- Certain nonresident alien employees
¹ 2007 limits. Limits are indexed annually.
This information does not constitute tax advice. Please consult your tax adviser for specific tax information.
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