Are insurance premiums wages when calculating max profit share on solo 401(k)

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Topic Author
cwalli80
Posts: 5
Joined: Tue May 24, 2022 2:35 pm

Are insurance premiums wages when calculating max profit share on solo 401(k)

Post by cwalli80 »

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!
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nyinvestor718
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Joined: Thu Mar 05, 2009 6:59 am
Location: New York City

Re: Are insurance premiums wages when calculating max profit share on solo 401(k)

Post by nyinvestor718 »

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".
Topic Author
cwalli80
Posts: 5
Joined: Tue May 24, 2022 2:35 pm

Re: Are insurance premiums wages when calculating max profit share on solo 401(k)

Post by cwalli80 »

nyinvestor718 wrote: Tue May 24, 2022 11:06 pm Yes, both health care premiums and HSA contributions.
Thank you!
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