Defined benefit PLan

[TAX]

A financial planner told me today that my client can still setup and deduct contribution for defined benefit plan for 2007.

He is suggesting that client can deduct $150,000. He can put all in reg investment account under defined benefit plan or client can also split between reg account and Life insurance policy.

Does this sound right?

Thanks!

[BOB W]

My experience has been that a DB Plan can be setup any time before the Corp return is due, including extensions.........................Your client needs to be commited to this annual payment for 5 years or he could loose the deduction.

$150,000 sounds a little high..... If his W-2 salary is $150,000 and he is 50 or older> it is possible. What about other employees?

[Burke]

The life insurance policy part does not sound right. Get more details.

[TAX]

My experience has been that a DB Plan can be setup any time before the Corp return is due, including extensions.........................Your client needs to be commited to this annual payment for 5 years or he could loose the deduction.

$150,000 sounds a little high..... If his W-2 salary is $150,000 and he is 50 or older> it is possible. What about other employees?

Can Planner create document now dating 12/31/2007. Is this allowed?

He is 50 or older. He and his wife both are doctors and this will be one plan. They both have their own corporation.

Thanks!

[BOB W]

Can Planner create document now dating 12/31/2007. Is this allowed?

He is 50 or older. He and his wife both are doctors and this will be one plan. They both have their own corporation.

Thanks!

Officially you are correct, 12/31/2007 was the deadline. Over my last 35 years in this business, there seems to be no resistance by Enrolled Acutaries (EA) setting up a back dated plan. But you need to discuss this with the EA that is going to certify the plan.