AmyC
Expert Alumni

Retirement tax questions

The IRS limits contributions to plan specifications or 100% of the employee's compensation, whichever is less.

Reference: Retirement contributions  limit

 

Your income changes when you deduct the amounts into the plan. If you have $30k income and then pay $30k into plan, it is subtracted from your income, then you have no income. You have to find the sweet spot for you to have income and deduct the business contributions.

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