S corp 401(k) profit sharing contribution calculation
S-Corporation. 1 owner. Owner grossed around 400K for the year. So far, has W2 wages of 25K.
Due to Secure act, I can still open a 401(k) up until tax filing deadline. However, only profit sharing contributions can be made. Are the profit sharing contributions based on W2 income, or the K-1?
Permalink Submitted by Alan - IRA critic on Tue, 2022-12-27 19:02
The PF contribution is limited to 25% of W-2 income. K-1 income cannot be used. The S Corp filing deadline is 3/15, or 9/15 with a filed extension.
Permalink Submitted by William Tuttle on Wed, 2022-12-28 04:35
An S-Corp 2% shareholder-employee must receive reasonable compensation.