SGM wrote:Employee contributions require fica payments. Employer contributions do not.
SGM, do you have a citation to support not paying fica taxes on the employer contributions? We incorporated for this year and are filing as an S Corp. Initially I was under the impression that employer contributions to our soon-to-be opened solo 401k would be exempt from fica taxes, but I haven't been able to find a citation for this.
I tried getting a straight answer from our cpa and on this forum before as well and left with the impression that we're stuck paying fica taxes on the employer contributions. I'd love to be proven wrong and would be eternally grateful if you have an IRS citation to throw in my hopefully-mistaken CPA's face.
We actually put off opening the solo 401k as sole proprietors because it looked like we were stuck with fica taxes either way and we needed a bigger emergency fund anyways.