Profit Sharing S-Corp % for Spouse and Self

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duckfan101
Posts: 12
Joined: Wed Mar 28, 2018 1:42 pm

Profit Sharing S-Corp % for Spouse and Self

Post by duckfan101 » Wed Jun 13, 2018 7:09 pm

S-corp solo 401k. I max out the 403b on day job, wife is a SAHM helping me out in the business.

Can someone help me figure out the calculations for each person on what can be an employER contribution? As I understand 25% of gross (minus employee contributions)

Would the employER contributions be?
Wife: 8,615.00 - 6,470.15 = 2,144.85 x .25 = $536.25
Self: 9,000.00 x.25 = $2,250

Now, since the rules state I must give the same profit sharing amount percentage to both myself and spouse what would I be able to contribute?



See below for most recent paystub:


Summary (Wife)
Description Current Year To Date
Gross Earnings $1,900.00 $8,615.00
Pre-Tax Deductions/Contributions $925.00 $6,470.15
Taxes $435.79 $955.87
Post-Tax Deductions/Contributions $0.00 $0.00
Net Pay $539.21 $1,188.98
Reimbursements $0.00 $0.00
Check Amount $539.21 $1,188.98



Summary (Self)
Description Current Year To Date
Gross Earnings $1,500.00 $9,000.00
Pre-Tax Deductions/Contributions $0.00 $0.00
Taxes $654.34 $3,159.04
Post-Tax Deductions/Contributions $0.00 $0.00
Net Pay $845.66 $5,840.96
Reimbursements $0.00 $0.00
Check Amount $845.66 $5,840.96

Spirit Rider
Posts: 8325
Joined: Fri Mar 02, 2007 2:39 pm

Re: Profit Sharing S-Corp % for Spouse and Self

Post by Spirit Rider » Wed Jun 13, 2018 8:32 pm

duckfan101 wrote:
Wed Jun 13, 2018 7:09 pm
S-corp solo 401k. I max out the 403b on day job, wife is a SAHM helping me out in the business.

Would the employER contributions be?
Wife: 8,615.00 - 6,470.15 = 2,144.85 x .25 = $536.25
Self: 9,000.00 x.25 = $2,250

Now, since the rules state I must give the same profit sharing amount percentage to both myself and spouse what would I be able to contribute?
Your calculation of your wife's contribution is not correct. The maximum employer contribution is 25% of compensation. Any employee elective contributions do not reduce compensation. Total employee + employer annual additions can not exceed 100% of compensation.

Wife: $8,615.00 * 25% = $2153.75, <= $8,615.00 - $6,470.15 ~= $2,145 maximum employer contribution.
Self: $9,000.00 x.25 = $2,250, <= $9,000.00 * $2,144.85 / $8,615.00 ~= $2241 maximum employer contribution.

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