Search the Community
Showing results for tags 'profit sharing calculation'.
Found 2 results
-
Apologize in advance for the rudimentary questions, have already tried searching previous threads for my answers. In my limited understanding when doing new comp, my goal is to maximize the HCE's total contributions. The remaining gateway to eligible NHCE is the lesser of 5% of comp or 1/3 of the highest allocation percentage of an HCE. Upon 401(a)(b) failure, is it in my best interest to allocate more to the elder NHCE's? If so is there a general formula to achieve the correct amount? In my experience the 401(a)(b) seems really finicky and feels almost arbitrary at times. Once again I'm sorry if this isn't the correct place to ask, my previous resources weren't helpful for me.
-
I have a plan where one of the employees went from a W-2 employee to a partner. He received a W-2 and K-1 income. While I agree that the two pieces need to be added together to calculate the profit sharing contribution, I am being told to ignore the fact that the participant was a w-2 employee when doing the earned income calc for the profit sharing contribution (i.e. not reduce Earned income by employer contribution for their share of the contribution on their w-2 compensation) and also adjust the SS Wage base for this individual. I looked in the ERISA Outline book and can't find anything specific on this. Can anyone shed some light on this or provide a solid reference siting?
