"emma" <emmarono[at]yahoo.com> wrote:

- quote -

The flow thru from an S is not subject to SE - Thus NOT
earned income and NOT eligible for inclusion in the SEP
calculation.

Rgs,

Mark

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emma wrote:

- quote -

Probably 25% of wages, or $43,000, whichever is smaller. If
you can find the plan document floating around somewhere, it
may be more restrictive, but not less restrictive.

- quote -

That's how you'd do it for a partnership, but not for an
S-corp.

- quote -

The person who prepares the S-corp return should be able to
tell you. (If you don't know how to calculate the SEP
amount, you probably ought not be doing the 1120S, either.).
Assuming no other employees, and an agreeable plan
document, 47,450 x 25% = 11,937.50.

Phoebe

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"emma" <emmar...[at]yahoo.com> wrote:

- quote -

Did you read IRS publication 560?

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I have a client that has an S Corp. He pays his SEP
directly from the corporation, as a deduction.

His K1 ordinary income before the Sep deduction will be
$128566. His Salary was $47750 (paid out of the S corp) He
wants to max out his Sep. I'm getting different answers
from different people.

1. The guy that handles his SEP says the amount is 15% or
$43000, whichever is greater. (I don't think this is right)

2. Another CPA I talked to said that you combine the Profit
plus his salary ($128566 + $47750)= $176316 x 20% = $35263

How do we figure the amount for his Sep deduction?

Thanks for your help

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