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I am the 100% owner of my S-Corp & W-2 myself for $36,000 in…

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I am the 100%...

I am the 100% owner of my S-Corp & W-2 myself for $36,000 in 2017. I believe my maximum SEP contribution is $9,000. Is that correct? My K-1 amount does not figure in to the SEP contribution, does it? I did the same thing in 2016 but notice that my S-Corp return is showing a deduction of $15,000 on line 17 of the 1120-S. I think I may have done that incorrectly last year. How do I correct it?

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Submitted: 5 months ago.Category: Tax
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Answered in 45 minutes by:
3/9/2018
Tax Professional: Lev, Tax Advisor replied 5 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,333
Experience: Taxes, Immigration, Labor Relations
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Yes - your assumption is correct.

SEP contributions must be made by your employer only.

Your employer is S-corporation

Maximum SEP contribution is 25% of compensation to you as an employee

income reported on K1 is reported to you as a shareholder - not as an employee.

It is not considered as your compensation for SEP contribution purposes.

Your employee compensation is your wages - generally teh amount reported on W2 box 1

So $36,000 * 25% = $9000.

.

If you reported incorrect deduction - to correct that after teh tax return is filed - you will need to file an amend tax return.

Let me know if you need any help.

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Tax Professional: Lev, Tax Advisor replied 5 months ago

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