Discussion:S-Corp Profit Sharing Contributions
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Discussion Forum Index --> Tax Questions --> S-Corp Profit Sharing Contributions
| 29 November 2008 | |
| Assuming a single-employee S-CORP, I would like to provide the employee with a significant profit-sharing (retirement) plan that does the following.
For example: 80,000 Salary 40,000 Annual Pension Plan Contribution (fully funded by S-CORP, not employee) Is this possible, or is the S-CORP Pension contribution always based on a capped percentage of an employee's salary? Thanks for the input. | |
| 29 November 2008 | |
| You seem to have a very confused perception of deferred compensation plans.
Why don't you sit down with a tax professional to work out what you wish to do? There's a difference between a defined contribution vs a defined benefit plan, a difference between a SIMPLE, SEP, Keogh, 401(k). From what you're describing, you're looking to fund either a 401(k) plan or a SEP. 401(k) is employee deferred, SEP is not. And yes - there are caps based on employee compensation - both percentage wise and salary limits. | |
| 30 November 2008 | |
| Hey Jamoc, there is a way to get $40,000 into a qualified plan. In fact, there is a way to get $60,000 into a qualified plan. Call your tax advisor on Monday and ask him to explain defined contribution plans, elective deferrals, and defined benefit plans. He will love you for increasing his billable hours. | |
