Discussion:401k contribution for spouse instead of sole prop
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Discussion Forum Index --> Tax Questions --> 401k contribution for spouse instead of sole prop
| 8 January 2007 | |
| Is there anything wrong with a Schedule C filer who employs the spouse and decides to bonus the spouse at year end so that she can make a 401(k) contribution before the deadline even though there were no deferrals throughout the year? Schedule C filer did not contribute anything to the plan as an ER contribution --- only paid final paycheck which they want to defer as an EE contribution? Spouse has worked in the business since June. Also, no 401k contribution to the Schedule C business owners plan because they did not have enough profit/cash from the business so contributed to the spouse's plan via the wages since she is over 59 1/2, giving them access to the $$$ if needed? | |
| 8 January 2007 | |
| Deback - I saw your name here but no response. Did you have a thought on this? | |
| 8 January 2007 | |
| Chase; I can chime in...but because a 401K is a discretionary plan, I would assume that if the employee wants to contribute to a 401K even if no ER contributions, they may. The timing of the salary I don't think is an issue since the SCH C wants to determine if there is enough E&P to pay a salary to the spouse?
Of course, this is my opinion; I certainly would wait for more responses before you go with the "law according to Sandysea"...hehe | |
Bottom Line (talk|edits) said: | 9 January 2007 |
| Something weird's going on with Deback. I noticed it last night. Seems like whenever she reads a thread, it comes up that she replied. Maybe Tim can help. | |
| January 9, 2007 | |
| No, nothing is wrong... Deback is helping to make TaxAlmanac a better place. I've been working with her to begin to categorize the discussions... notice the 401K category link at the bottom of this message? Look through the recent discussions and you'll see more of them. I think the LLC category is really looking good! I haven't announced it yet as there are some issues to be considered before others can join in. Thanks for noticing and letting me know though!
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