I have a Profit Sharing Plan for my business. Can I now terminate that plan and set up a ExpertPlan OnePersonPlus® plan?
Yes. Your existing profit sharing plan can be terminated and you can set up a ExpertPlan OnePersonPlus plan. However, if you have already made your profit sharing contributions for the current plan year, those contributions might not be deductible if the defined benefit plan is established for the same year. In any year in which an employer maintains a defined benefit plan and a defined contribution plan, the maximum deductible limit for both plans is the GREATER OF (1) 25% of total compensation, or (2) the amount necessary to fund the defined benefit plan. Usually, the contribution amount for the defined benefit plan exceeds 25% of total compensation, so any employer contribution to the defined contribution plan might not be deductible this year. Please talk to your tax advisor and refer to IRS Publication 560 concerning deductibility and carryovers to future years. However, under the Pension Protection Act of 2006, a profit sharing contribution of not more than 6.0% will not affect t
Related Questions
- In the past, I have had a Profit Sharing Plan for my business. Can I now terminate that plan and set up a Small Business Pension Program?
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- How do you convert a Profit Sharing Plan with another trustee to a Principal Trust Individual 401(k)?
