Let me clarify: I am a partner in a 40+ group of physicians. As such, I am approximately a 2.5% owner of the company. This is my main source of income and I have been with this group for 4 years. Although I am a part-owner of the company, I am paid via 1099. As such, I make both employee and profit sharing contributions myself, not the company. This company is considered an Affiliated Service Group. I have a second, completely unrelated company where I am the 100% owner and I do workers compensation reviews. For that company I make only about 60k a year and make both employee and profit sharing contributions myself. So, for 2024 my plan was to place $69k of profit sharing in the Company #1 401k. I can easily do that since my salary is over the $345k allowance. I would do all my allowed elective contributions of $30,500 in the Company #2 401k since I have enough earned income there (approx. $60k). Now, in my opinion, I should still be able to ALSO place 20% profit sharing in my Company #2 401k which would be approximately $12k. In my opinion, the IRS allows that for unrelated companies, which is what I have. At the risk of muddying the waters, my CBP with Company #1 is a PBGC plan which does NOT limit my profit sharing contributions to 6%. Hope that clarifies.
