I am the sole owner and employee of a 1120S and draw an annual salary of $12,500. My net profit fluctuates from 250K to 350K every year on my K1. I normally will take about 200K in distributions each year. I have a SEP that I personally contribute the max each year, based on what my CPA told me in the past. My CPA has always taken the deduction on my personal taxes. Last year on my personal taxes ( in 2022 it was $61K) they took as a deduction on my personal taxes and that was the total I contributed personally. I recently was talking to another CPA and they told me that I was misinformed and that the max that I can contribute is 25% of my compensation (W2) not any profits from the S Corp or any distributions I take from the business, those do not count. I am working on my own return in Turbo Tax but need guidance on what is correct. Can someone advise me on the max contribution and if I can take it as a deduction on my personal taxes?
