Discussion:Profit sharing/excess contributions
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> Profit sharing/excess contributions
Discussion Forum Index --> Tax Questions --> Profit sharing/excess contributions
| 1 February 2008 | |
| My summary is saying that the max contribution to a profit sharing plan is 100% of salary up to 45k. With a deductible portion up to 25% of salary. Is it possible to go above deductible portion or is that considered excess contribution and subject to penalty.
IE. salary 50k. One employee can profit sharing be 45k or will there be 10% on amount greater then 12,500? Thanks | |
| 1 February 2008 | |
| Assuming the employee is under the age of 50, the limit for 2007 would be $15,500 for the elective deferrral and $12,500 for the profit-sharing portion. Excess amounts are subject to an excise tax of 10%. | |
| 1 February 2008 | |
| A 401(k) plan can be part of a profit sharing plan. In your case, since there is no elective deferral provision in the plan, you are limited to $12,500. | |
To join in on this discussion, you must first
log in.
