Tax Talk – What You Need to Know
Upcoming Compliance Deadlines for Defined Contribution Plans
Reminders for Plan Participants
March 15
- Employer contributions due to the retirement plan’s trust for S-corporations and partnerships with December 31 fiscal year-ends, in order to take deductions with no corporate tax extension.
- Forms 1042 and 1042-S due to the IRS to report income tax withheld from distributions made to nonresident aliens and retirement plan distributions made to nonresident aliens.
- Deadline for distributing ADP/ACP refunds without incurring a 10% excise tax on the employer (due 2½ months following the plan year-end).
- Deadline to apply to the IRS for a waiver of the minimum funding standard for defined benefit and money purchase pension plans (due no later than the 15th day of the third month after the close of the plan year for which the waiver is requested).
- Electronic filings of Form 1099-R for 2022 distributions are due to the IRS.
Remind Participants To:
- Update their beneficiaries – when it comes to beneficiary designations, many participants may “set it and forget it,” assuming plan custodians and administrators are responsible for beneficiary information and updates. Others mistakenly believe that they are taken care of by having a will or estate plan. Costly mistakes and potential heartache for loved ones can be avoided with this simple but important reminder.
- Increase their contribution rate – increasing this percentage at the beginning of each year, with the goal of ultimately saving at least 15% of their salary annually, is a worthwhile strategy for participants to adopt on their road to a comfortable retirement. The contribution limit for 401(k), 403(b) and 457 plans increased in 2023. Participants can now contribute up to $22,500 which is a $2,000 increase from last year’s $20,500 limit. If the participant is age 50 or older, the 2023 maximum limit is $30,000, which includes the $7,500 catch up contribution allowance for 2023.