Contributions to retirement plans for S-Corp
Good morning. Trying to research some options for a 25% owner in an S-Corp. The equity is shares in a franchise.
The owner 25% owner gets a W-2 and a K-1. There are a small number of owners in the S-Corp.
The business has part time employees but I don’t have all the details on hours worked and ages.
The goal is for the owner to maximize deferrals but also minimize what they would need to contribute for part-time employees. I know there’s SIMPLE IRA and other plans. Just trying to figure out due to the setup if they would qualify for any other plans geared towards small business owners with a limited participants.
Thank you for your help in advance.
Permalink Submitted by Alan - IRA critic on Fri, 2024-06-14 17:22
Sep and SIMPLE IRAs allow the employer to limit contributions (or not) to employees who have worked in a stated number of prior years. Contributions to S Corp owners are based on W-2 wages. K 1 income cannot be used to support contributions. Check forms 5305 SEP and SIMPLE for details.