Company Owners and Tracking Hours: the ROBS Plans

• If you invested your own retirement monies into the Corporation, you must be considered a bona fide employee of the Corporation. 
• Track the hours you work. That is how we establish you were/are a bona fide employee of the Corporation that sponsors the 401(k) Plan you are utilizing for your business financing strategy. 
  • Business owners should start tracking hours you work effective as of the date the Corporation was established (you are already working for the company at that point, spending a lot of time getting the business ready to go live). 
  • Our team must collect the hours you work at the end of each year as the DOL & IRS require us to report certain information about employees eligible to participate in the 401(k) Plan, including you. 
  • You don’t need to use a fancy time tracking system, use an excel spreadsheet and at a minimum, track your hours by week. 
• This is an important requirement. In order to qualify to participate in a company retirement plan, roll retirement monies into that plan and invest those monies into your Corporation, you must be a bona fide employee of the company sponsoring the 401(k) Plan. Think about it this way, in order to participate in a 401(k) Plan, you must be an employee of the company sponsoring the 401(k) Plan (otherwise we could participate in any 401(k) Plan in the country, at our choosing).

Leading Retirement Solutions

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