selfemployedinohio

Ok, thank you! But I am correct in that since they are all controlled groups, my second S Corporation income and my wife's schedule C income would be included in the 401k? That is, she would be a participant and have to receive the 3% for the "safe harbor" and my 3% would be based on both of my S Corporation wages?

I have a two S Corporations (employee-shareholder) and I have three unrelated employees. My wife has a sole proprietorship (schedule C). We have kids under 21, so we are part of a "controlled group." One of my S Corporations (the one with employees) has a safe-harbor 401(k) with 3% employer contribution (regardless of elective deferrals). I want to make sure I'm doing this right . . . . my salary from the first S Corporation is $60,000 and is $20,000 for the second S Corporation . . . . my employer contributions is 3% x (60,000 + 20,000) and my employee contribution is $19,500. My wife has self-employment income from her sole proprietorship of $50,000. She is able to be a plan participant under the "controlled group" rules and her employee contribution is $19,500 and her employer contribution is 3% x $50,000. The Safe Harbor 401(k) I have set up include profit sharing as well. If we decide to do a 10% profit sharing one year, I would have an additional $8,000 (10% x ($60,000 plus $20,000)) and my wife would have have an additional $5,000 ($50,000 x 10%). Does that all sound correct?