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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