Ephesians3-14
Level 8
01-04-2021
06:47 AM
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I have a client who is a partner in his law firm. His 2020 Sched K-1 ordinary income is $100,000 and his guaranteed payments are $200,000. On the draft of the 2020 Sched K-1 it also shows that he made $8,000 in 401k contributions to a Traditional 401k.
As I'm preparing his 2020 personal tax return, I'm wondering if I can advise him to also make a profit sharing contribution based on this income. Is that allowable?
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sjrcpa
Level 15
01-04-2021
08:47 AM
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No. Any profit sharing contribution would need to be through a partnership plan and would be shown on his K-1.
Ex-AllStar
