Guest chris4013 Posted May 20, 2003 Posted May 20, 2003 In calculating the S/E maximum allocation do I still reduce comp by the S/E's 401k contributions? A better way to ask: Can I contribute 25% of my SE Income + the 402g limit? and Will the SE's 401(k) contributions reduce the basis in which the 25% threshold is calculated?
Archimage Posted May 20, 2003 Posted May 20, 2003 No, you would not calculate the max by deducting deferrals. You can contribute 25% of your SE income plus deferrals. However, to calculate the 25% deduction, there are adjustments made due to self employment taxes. Your true contribution will be right at 20%. You can defer an additional 12,000 for 2003.
Guest chris4013 Posted May 28, 2003 Posted May 28, 2003 When I calculate my compensation for a contribution, don't I reduce the compensation by deferrals?
Archimage Posted May 29, 2003 Posted May 29, 2003 No, you do not. Before EGTRRA you would have. This is a deduction to arrive at adjusted gross income. It is not used anywhere on the schedule c.
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