Question
Robert Bubba Breaux, 32, owns and operates a po boy shop in New Orleans, called Ya Mama's Po Boys. It is a family business that
Robert "Bubba" Breaux, 32, owns and operates a po boy shop in New Orleans, called Ya Mama's Po Boys. It is a family business that sells authentic New Orleans fare, just like "ya mama would serve" assuming she was from New Orleans. Bubba wants to establish a retirement plan so he can save for his retirement and the retirement of his employees on a tax-deferred basis. He has recruited you to assist in making a plan selection
Bubba only wants to contribute in years that he makes a profit and does not want to incur much if anything on administrative expenses. Since the employees of Ya Mama's are all family members, Bubba is happy to contribute on behalf of the employees when the restaurant is doing well
A. Based on Bubba's objectives, what type of retirement plan is most suited for his needs?
B. Why might you recommend that Bubba utilize a qualified profit sharing plan with a CODA in lieu of the suggestion in question 1? (if you suggested a profit sharing plan with a CODA for question 1, reconsider)
C. Bubba employs the following individuals. Which employee may he exclude if the plan was SIMPLE, SEP or 401(k) profit sharing plan?
Name | Age | Years of Service | Full-Time/Part-Time (<1,000 hours) | Annual Income |
Bubba | 32 | 13 | Full-Time | $35,000 |
Mama | 49 | 4 | Full-Time | $35,000 |
Trey | 22 | 2 | Full-Time | $32,000 |
Chad | 28 | 4 | Part-Time | $26,000 |
Rice | 18 | 1 | Part-Time | $12,000 |
Thank You!
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