I have an S-Corp where i am the only owner and employee. Say as W-2 employee i I earned a taxable wages of $65,000. As an employee i contributed $19,500 to a 401k. As an S-Corp owner/employer I contributed $16,250(25% of $65,000) to SEP IRA.
what line item in 1120S do i show employee 401k and employer SEP IRA contribution? Also on line item 7 i.e compensation of officer do i show a wage of $65,000 or $84500 ($65000 + $19500 since the 401k is employee contribution)
Great Thanks. I think i get it.
So in 1120S Line no 7 i.e Compensation of Officers i will be entering $84500 ($65000 + $19500). I was getting confused because in W2 my taxable income is $65,000.
Then looks like the employer SEP IRA contribution i.e $16250 will go under line no 17 i.e Pension, profit-sharing, etc., plans .
Can you please confirm my observations?
Thanks a lot for your help, also if you are a accounting specialist from turbox tax and can validate my return for the extra $60 i would love buy in.
I think you really need local professional assistance to be educated properly ... the employee's contribution from their wages goes in box 12. The employer's portion does NOT go on a W-2.