We understand that filing taxes can be the last thing anybody wants to do. However, it is important to remain compliant with the IRS. We have provided the resources below to help save you time and make this process easier for you.
What Does ERSOP® Need From Me
In Order To Do My Administration?
Every year, when it has come time to do your administration, ERSOP® will send both letters and emails requesting the information from you that is listed below. You may select each item to expand more details and help regarding it. Please refer to this list as often as you need to.
*Please note that not every item may be applicable to you.
- Profile Update
- Employee Census
- Informal (or Formal) Business Valuation
- Plan & Trust Bank Account Statements
- Broker Account Information (Only If Applicable)
- Distribution Paperwork (If Applicable)
- Annual Administration Fee Payment
PLEASE NOTE: Even if no changes have been made since the previous year, we will still need you to submit this form stating so.
The employee census form is very important for us to be able to complete the administration. We cannot proceed with the annual administration until we have the completed census form.
All employees of the Corporation are to be reported regardless of eligibility. Please make sure to contact our office if you have any other businesses that are employing individuals. This is necessary so that we can make a determinitation as to whether or not those employees should be included on the census.
Any officers and/or trustees need to be included on the census, regardless of whether salary was taken or not.
The information MUST be reported using our form template which can be found to the right of the page.
First, let us answer some questions regarding valuations:
What is a valuation?
A valuation is the fair market value determined of your company at the end of the tax year.
An Informal valuation is an estimate made by either your accountant or a director/trustee of the Plan.
A Formal valuation is a professional valuation performed by a licensed CVA. Unless your CPA also holds a CVA title, it is not considered a formal valuation.
While it is beneficial to have a formal valuation performed ever year, due to keeping expenses lower, it is not necessary unless you have either: purchased or are planning to purchase additional stock, bought any shares back, or are looking to sell your business. However, please first reach out to our administration department if you plan to do any of these.
There is no one way to really determine how much a business is worth.
Basically, what do you believe the value of your business is worth at the end of your tax year?
Every year we will need copies of the monthly statements of your Profit Sharing Plan & Trust bank account (if it is opened), inlcuding brokerage statements, from the beginning of your plan year end to the end of your plan year end. If you have multiple participants with accounts, we will need each participant’s account statements for the full tax year as well.Please provide detailed explanations for any deposits/withdraws that occured to/from the brokerage/plan account so that we can report these accurately. *Failure to provide an explanation may result in the inability to complete the adminsitration or inaccurate reporting to be filed and an amendment fee will be charged if the the filing needs to be amended for this reason.
If you have closed your PSP&T bank account, it is necessary for us to obtain the statements up until the account was closed. Once it has been reported that the account was closed, then this item is no longer applicable to you unless you decide to reopen the account. You must inform our administration department if you have decided that you want to reopen your PSP&T bank account.
We only need copies of your Corporate statements IF additional stock was purchased, stock bought back, or a contribution was made and we need to see the money going into or coming out of the account. Other than the applicable statement, it is unnecessary to send us your Corporate bank statements.
• The participant name, hours worked, and if applicable, the termination date and termination wages (if any)
• Copies of the filed Form 1099R(s) and signed Form 1096
• Copy of the relevant participant distribution form(s), filled out (found in your blue Profit Sharing Plan binder)
If you have not filed the Form 1099R(s) & 1096, ERSOP can produce them for a fee of $250 for the initial filing of the forms and $100 for subsequent filings. If you hire ERSOP to produce the forms, please sent the data to us as soon as available or no later than December 1st of the distribution year.
The IRS filing deadlines for the Form 1099R & 1096 are as follows:
1) Copy C for Recipient (participant) is due January 31st (of year after distribution year)
2) Copy A for IRS is due January 31st (of year after distribution year)
In order to complete your administration, we will need payment of $990 along with the other data. If you have sent all of your data into us after ERSOP’s data submission deadline, there will be an $85 late filing fee. We have established our deadlines in order to be able to assure our clients that their filings will be completed in a timely manner.
*PLEASE NOTE: Only sending in payment before the deadline without the other data, will still be considered late and the $85 fee will be added to your account.
Annual Administration Forms
These forms are for existing clients. Please download and fill out the Employee Census, Informal Valuation, and Profile Update forms.
We are no longer offering an upload feature on our website. However, we will be featuring a client portal accessible through our website, coming soon.
For the time being, please send completed forms to us either by email: email@example.com, or mail into our office. You may also fax individual forms, however, please DO NOT FAX bank statements.
I Would Like to Begin Making Contributions. What Steps Should I Take?
There are a few factors to consider when you begin making contributions. Please refer to our Client Resource page ‘Contributions & Distributions‘ for more in-depth explanation. We highly advise calling our administration department and discussing this with on of the administrators to better assist you with the process (714) 842-1212
What Should I Do If I Want To Begin Buying Shares Back?
If you are in a place where you can start putting money back, great! Please reach out to us for a full list of steps you will want to follow in order to complete this. Please do not buy back the shares before speaking with us, as there are a few things necessary to be done before doing this.
I've Sold My Business. What Do I Do Now?
If you’ve sold your business, our administration department will need specific things in order to proceed with the annual tax filing. Please contact us so that we can provide you a checklist of needed data: (714) 842-1212.
What is My Tax Year-End?
If you are unsure what your tax year-end may be, please contact our administration department and we’ll be happy to let you know. (714) 842-1212.
When Is My Deadline?
There are two different deadlines to consider: ERSOP’s deadline for data submission and the IRS’ deadline for filing the tax return.
The IRS’ deadline of the return is 7 months, plus a 2 and 1/2 month extension, after the Plan / Corporation year end. For example, a December 31st year end due date is the last day of the next following July which may be extended to the 15th day of the next following October.
What if I Have Taken or Am Looking to Take A Loan?
There are specific factors to consider when it comes to loans. It also depends on what kind of loan you are looking to take or have taken. Your Plan document has specifics on loans that need to referred to. Please contact our administration department if you are thinking of taking a loan. (714) 842-1212.
What If I Have Someone Else I Want to Do My Administration?
It is very important to let our administration department know that you will be having someone else perform your administration for the Plan. Please remember that the 5500 form for the Profit Sharing Plan & Trust that is to be filed, is very specific to the Plan. While we highly advise letting us handle this for you, we at least appreciate being informed if you have planned to have this service performed elsewhere so that we can make note of this in your file.
Should you decide to have ERSOP perform your administration at a later time, after it has been filed elsewhere, it is likely that additional fees will be imposed for needing to review (and possibly amend) any and all of the work that has been done up until that point.
What is the Penalty for Filing Late?
With ERSOP, we charge a late filing fee of $85.
The penalty for filing late with the IRS, however, is $25 a day for every day you have not filed to a maximum of $15,000 each year.
When Do I Need A Formal Valuation Performed?
Please refer to the information to the left of the page and select the tab labeled ‘Informal (or Formal) Business Valuation’.