ABCD149
Level 2
12-07-2019
02:31 AM
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I have an S Corporation with gross payroll of 50K for me as, an only shareholder and employee I have deducted 18,500 salary deferral for 401(k) solo. The employee contribution to 401k would be 12,500 at 25%. My question is, in additions to this can I contribute $12,500 (25% of wages to SEP in the same year and deduct on my 1120S?
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sjrcpa
Level 15
12-07-2019
02:31 AM
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No. Your maximum annual addition to all retirement plans is 25% of salary.
Ex-AllStar
ABCD149
Level 2
12-07-2019
02:32 AM
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This is from https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-o...
Deferrals limited by compensation
Although plans may set lower deferral limits, the most you can contribute to a plan under tax law rules is the lesser of:
the allowed amount for that plan type for the year, or
100% of your eligible compensation defined by plan terms (includible compensation for 403(b) and 457(b) plans).
Deferrals limited by compensation
Although plans may set lower deferral limits, the most you can contribute to a plan under tax law rules is the lesser of:
the allowed amount for that plan type for the year, or
100% of your eligible compensation defined by plan terms (includible compensation for 403(b) and 457(b) plans).
sjrcpa
Level 15
12-07-2019
02:32 AM
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401(k) $18,500 is the deferral. Employer contribution to 401(k) and SEP contribution are not deferrals.
Ex-AllStar
Ex-AllStar
ABCD149
Level 2
12-07-2019
02:32 AM
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Ok Thanks
