Level 7

Question

form 8881

Forum|Forum|2 years ago
December 27, 2023
2 replies
16 views

Hi to all. I need a help walk through how to file 8881 for a S-Corp. Also I would like to understand simply what line 7 and 8 mean :

7- Credit for small employer pension plan startup costs from partnerships and S corporations

8 -Add lines 5, 6g, and 7. Partnerships and S corporations, report this amount on Schedule K. All others,
report this amount on Form 3800, Part III, line 1j

What is thehe first step? and so on..

I was wondering while the setup costs are incurred in the first year and it has been done and employees contribute ongoing basis how come this tax credit is spread over three consecutive years? it means employer can apply this credit for 3 years if employer run this set-up one more time after the first year in the next year and third year? Assume the cost is $4500 and the max of credit is $5000, for the rest should apply in the next year? Or something else?

And should employer have contribution in Auto-enrollment plan? In this form line 1 to 5 is

I do not know why when I complete this form 1-5, the cost deducted from line 17?

And If employer did not have any number in line 17, RED ERROR popes up.

What does mean Auto-enrollment? Is there any way to set-up plans?

ProConnect Tax

This topic has been closed for replies.

sjrcpa

Level 15

form 8881 for S-Corp - Intuit Accountants Community

The more I know the more I don’t know.

IRonMaN

Level 15

If you have to keep asking because you can’t figure it out, it might be time to refer the client elsewhere.

Slava Ukraini!

HOPE2Author

Level 7

I've been going through the articles on Form 8881, and while they provide a good theoretical understanding, I've encountered some practical challenges when filling out the form. I believe it's crucial to be able to discuss these issues and seek clarification when needed, as tax preparation can be complex.

I understand your perspective about referring clients elsewhere if we can't figure things out, but I believe questioning is a crucial part of the learning process. None of us knows everything, and it's perfectly normal to seek advice and learn from each other. Instead of making someone feel disappointed or discouraged, I think we should be supportive and tolerant of each other's learning curves.

Let's aim to create an environment where we can openly discuss challenges without the fear of judgment. If you don't have the answer, that's okay—we can work together to find it. It's about helping each other grow rather than causing unnecessary stress.

Looking forward to your thoughts on this.

qbteachmt

Level 15

This third posting is in the ProConnect subtopic section.

These were not asked in either of the other two, so I will try answering:

"What does mean Auto-enrollment?"

Instead of requiring an employee or even a military spouse to make elective deferrals, the employer can make nonelective contributions, like a Bonus, under their established qualifying plan, and every new employee that is expected to meet the eligibility, can be automatically enrolled in the retirement plan as part of the hiring paperwork, unless they opt out.

"Is there any way to set-up plans?"

Yes, but that is a whole other profession. It's not part of Income Tax preparation. It's Human Resources and Retirement Planning, as part of Benefits. It's typical to work with an insurer and/or a brokerage house, maybe a banker. It helps to know ERISA: "ERISA plans must follow the rules of the Employee Retirement Income Security Act, from which the plan earned its name. Non-ERISA plans do not involve employer contributions and do not need to follow the stipulations of the Act. Find out which plan federal laws require your enterprise to carry."

Don't yell at us; we're volunteers

HOPE2Author

Level 7

It was very helpful, thanks a lot.

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