Agreement Between Federal Returns

Thursday, September 15, 2011

Your qualified retirement plan has a federal return, Form 5500, just like your business has a federal return. The contributions made to the retirement plan are listed on both returns. All plan sponsors need to annually confirm that their business return lists the retirement plan contribution correctly. The contribution amounts should agree between the two returns.

Administrative Retirement Services, Inc. does not see the business return (BR) while preparing annual administration for the retirement plan. The only time we see a BR is when it is part of a retirement plan audit. When plans are audited by the IRS, the BR is commonly requested so the contribution amounts can be compared between the returns.

When ARS prepares the Form 5500, we list the contributions for the plan year on an accrual basis. Plan sponsors should list all contributions for the year on the BR regardless of whether they are on a cash or accrual basis of accounting. Please communicate the contribution information you receive from ARS to the accountant preparing your BR. ARS can also work directly with your accountant to confirm that the contribution amounts agree between the returns if you’d like. Please provide ARS the accountant’s contact information if you would like us to work directly together.

To discuss this information, contact Administrative Retirement Services, Inc.