The owner of an S-Corp can not be "self-employed" by the company they own. You are either:
1) An owner who takes the required yearly distribution which is reported on the K-1.
2) An employee of the S-Corp whose wages are reported on a W-2
3) Both 1 and 2 above.
401(k) contributions can only be made as an employee and the business must be the one handling those contributions through payroll. They are then reported on the employee W-2 in box 12, and the contribution amount is not included in box 1 of the W-2. The maximum amount of your allowed 401(k) contributions are limited by the "earned" income reported on the W-2. It has nothing to do with the income reported on the K-1.
