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I am the sole owner of an S corp and I pay myself through…

I am the sole owner...
I am the sole owner of an S corp and I pay myself through W2. I contributed 25% of my earnings to a SEP and took the deduction on my business return. There are no other wages on the personal return except the Scorp salary, I don't receive any tax benefit for the SEP contribution on the personal return, correct?
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Answered in 14 minutes by:
3/20/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,609
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello!

You are correct!

SEP IRA contributions are employer contributions and deducted at the S-corp level.

____

This is covered in IRS Publication 560 and I have placed a link to the tax map below along with the relevant excerpt.

https://taxmap.irs.gov/taxmap/pubs/p560-004.htm

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Where To Deduct Contributions

Deduct the contributions you make for your common-law employees on your tax return. For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U.S. Return of Partnership Income; and corporations deduct them on Form 1120, U.S. Corporation Income Tax Return, or Form 1120S, U.S. Income Tax Return for an S Corporation.

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Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., you receive from the partnership.) "

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,609
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified
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