How can I make K1 income not passive?

[msindc1]

Folks:

Client is a consultant, operating through an S Corp.  Client's SEP IRA contribution deduction is disallowed because she has no self-employment income.  But she does--all the money coming from the K-1.

Maybe Lacerte is treating the income as passive?  Is there something I have to do in the S Corp module (generating the K-1) to make the income count so that there can be an offset for teh retirement contributi9on?  Or in the Individual model?

Thanks.

Micah

[abctax55]

SEP IRA deduction would be taken on the S-Corp return, and based on the W-2 wages.

NOT on the F.1040

[msindc1]

Ah.  In that case, would you mind sharing how that is done?  Is it just a deduction in Pensions and Profit-Sharing Plans (and if there are multiple people doing voluntary contributions, do you not distinguish how much each person contributed?)

[PhoebeRoberts]

A SEP is an employer-funded plan. All covered W-2 employees get the same percentage.

[abctax55]

A SEP plan doesn't have an 'employee' deferral component.  It is 100% paid/funded by the employer.

Listen to the 'taxgirlie' @PhoebeRoberts