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Showing results for tags 'self employed'.
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Good morning to all, I have been asked to research the following: " Is it acceptable for salary deferrals to be funded well after the end of the plan year for self-employed individuals, i.e. sole proprietors. This is in the case of an ERISA plan, not a solo 401(k) plan. " Your thoughts, opinions, and explanations of your practices are appreciated, as always.
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I have a CPA asking for advice on completing the tax returns for a client who has a cash balance plan (I thought that was a CPA's area of expertise, but I digress). Plan sponsor is a LLC filing as a sole-proprietor. The CPA wants to know how much of the cash balance contribution applies to the owner and how much applies to employees. He is also asking if it is appropriate to report the owners "portion" of the contribution on Schedule 1 of the 1040 while the amount applicable to employees will be reported on his Schedule C. 1. Is it proper to report part of the cash balance contribution on Schedule 1 instead of reporting it all on the Schedule C? 2. If the answer to #1 is yes, how do we break down the cash balance contribution between the owner and employees? I am neither an expert on tax returns nor an expert on DB plans. I tried to figure this out from Publication 560 and it does say "Sole proprietors and partners deduct contributions for themselves on line 15 of Schedule 1" but I'm not certain if that is referring to just DC plans. -
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?
