Hello:
I understand that for an S Corp, the employer profit sharing contribution on a solo 401(k) is limited to 25% of compensation and it seems the most common definition for compensation is W2 wages (box 1 + elective deferrals). Given that health insurance premiums are paid as wages and would appear in box 1 I'm unclear if they would be included in the calculation. Can anyone clarify? I have a Vanguard Solo 401(k) if it makes a difference.
Thanks!
Are insurance premiums wages when calculating max profit share on solo 401(k)
- nyinvestor718
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Re: Are insurance premiums wages when calculating max profit share on solo 401(k)
Yes, both health care premiums and HSA contributions.
Judge Learned Hand: "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury".
Re: Are insurance premiums wages when calculating max profit share on solo 401(k)
Thank you!nyinvestor718 wrote: ↑Tue May 24, 2022 11:06 pm Yes, both health care premiums and HSA contributions.