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Good morning to all, Today we are working on the 401(k) plan of a sole proprietor who passed away in 2018. When the CPA sent the Schedule C, she made the comment that this is the Schedule C of the owner while she was alive, and that if I needed the Schedule C that is being filed with the estate, let her know and she will provide me with a copy. I wouldn't have even known that these are two different things, if the CPA hadn't brought it up, and while my first inclination tells me that the Schedule C while the owner was alive is the one I need, I don't know that for a fact. Does anyone else have any experience with this? Which of the two should I be using for 2018? Thanks in advance, as always.

I have a 3% nonelective safe harbor 401(k) Plan that is terminating effective 10/31/2016. The safe harbor is to be calculated based upon compensation from January - October. This is due to a business acquisition, so safe harbor status is maintained. There is one owner who receives Schedule C income. Safe Harbor has been deposited for the 3 non-owner employees throughout the year. The owner has taken $10,000 distributions periodically and the bookkeeper has made 3% safe harbor deposits based upon these amounts to the owner's account. The owner's actual earned income for the year will not be determined until sometime in the first quarter of 2017, but we would like to have all assets paid by 12/31/2016 to prevent another plan year. So...how do I calculate the owner's safe harbor contribution from 1/1/2016 through 10/31/2016? 1) Treat him as having earned $0. This would be a problem because, not only did he have safe harbor deposits, but he also deferred during the year. 2) Have the CPA estimate his earned income from 1/1/2016 through 10/31/2016 and calculate the safe harbor for the owner based upon this estimate. Any other options? Has anyone dealt with this conundrum? Thank you!

I have a take over plan that is a single member LLC that is taxed as a sole prop. The owner pays himself W2 wages in payroll throughout the year and then also files a Schedule C reporting his net income. For plan purposes, is his compensation W2 or Schedule C or a combination of both? Everything I have found states you cannot pay yourself W2 wages when you are a Schedule C filer, however this is how the CPA is doing it.

For a self employed defined benefit pension plan, what limitations are there on treating pension contributions as an expense (either on Schedule C Line 19 or on Line Form 1040 Line 28) when Schedule C earnings are negative?