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L
lyndaj0331
Level 5
April 17, 2021
Question

s-corp compensation for purposes of determining allowable SEP contribution

  • April 17, 2021
  • 4 replies
  • 23 views

Can you include draws as well as W-2 wages when computing the allowable SEP contribution limit?

Thank you.

This topic has been closed for replies.

4 replies

IRonMaN
IRonMaN
Level 15
April 17, 2021

There are no such thing as "draws" in a sub S.  And if you have to ask about including "draws" it sounds like they are already in potential trouble for not paying a reasonable salary for the year.

Slava Ukraini!
    L
    lyndaj0331Author
    Level 5
    April 17, 2021

    I guess I should have said distribution.  It happens to be a real estate agent and last year was an exceptional year in this particular area.  It is not expected that she will have the same level of income in the future and certainly did not have it in prior years.

    IRonMaN
    IRonMaN
    Level 15
    April 17, 2021

    Back to the original question - no you can't include distributions.

    Slava Ukraini!
      Accountant-Man
      Accountant-Man
      Level 13
      April 17, 2021

      W2 wages for all qualified employees in the s corp.

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