I started an IRA plan this year for the employees. When I received the W3 form, box 1. Wages is less than Boxes 3 & 5, social security and Medicare wages respectively - which I clearly understand the reason why. I also understand the business expense side of a matching contribution. However, I need help in figuring out what number to use for Salaries & Wages when filing my business tax return. After all, my expense as business was the full earnings amount from which then the employees decided to contribute to their own retirement plan.
Example:
Form W3
Box 1 Wages: $10,000
Box 3 & 5: $8,800
Total amount employees contributed to their IRA is $2,200
Business Tax Return Form 1120-S
Lines 7 and/or 8: Should I use number in Box 1 (which matches W2's) or number in Box 3 & 5 (which matches total earnings)
and if it's boxes 3 & 5 number $8,800, where does the $2,200 go? Note the $2,200 is the employee contribution, NOT the employer match.
I appreciate the help. Thank you in advance.
