minimum income to defer $14,000 in 2003

[Earl]

What is the minimum Sched C necessary to defer $14,000. Is it $14,000 or is it grossed up by the SE ded, $15,065...

You would then still owe income tax on the amount paid as SE tax, $1,065?

Thanks

[mbozek]

I dont understand the question. for deduction purposes the net earnings from SE are reduced by 1/2 of the SE tax. 1/2 of FICA tax on 14k is $1071. But there is no income tax due on amounts paid as FICA tax.

[Appleby]

I assume the individual is at least age 50, since you mentioned $14,000 as the deferral amount. The maximum salary deferral amount would be based on the Modified Net Profit, determined as follows Net profit- ½ SE tax.

Salary deferral limit is $14,000 or Modified Net profit, whichever is less

[Earl]

Thanks very much.