Change in corporate tax year

[Guest jmincin]

I have a DB plan that covers the owner and 4 employees. The owner is maxing out his benefits at the 415 dollar limit. My client just informed me that during 2004, he changed his corporate tax year from 6/1 - 5/31 to a calendar tax year. For the short tax year of 6/1/2004 - 12/31/2004 he deducted the full 6/1/04 - 5/31/2005 plan year contribution. So he and/or his accountant decided to us the contribution for the plan year that begins in the tax year. Then for the 2005 tax year, he'll be deducting the 6/1/05 - 5/31/06 plan year contribution.

First, does anyone see a problem with me switching the W-2 pays used from the current year pays to the prior year pays since the tax due date (without extension) will be before the end of the plan year? For my 6/1/04-5/31/05 plan year I used the pays earned during the plan year, but for 6/1/05 - 5/31/06 plan year I want to change my assumption and use the pay earned during the prior year (so I'd be using the same pay for two consecutive years.

Second, should I switch the plan year to a calendar year?