W-2 and S Corp Income

[Alex Daisy]

A client who participates ( a doctor) in a company that payes him W2 wages of about $100,000 and he also owns an S corp that had flow thru income of about $100,000. If he had a solo K set up, would we be able to consider both his income and profits for deferral and/or PSP contribution? Thank you.

[Bill Presson]

A client who participates ( a doctor) in a company that payes him W2 wages of about $100,000 and he also owns an S corp that had flow thru income of about $100,000. If he had a solo K set up, would we be able to consider both his income and profits for deferral and/or PSP contribution? Thank you.

S Corp dividends are not considered earned income.

[Belgarath]

Bill is correct.

If your client's CPA/Attorney are "prove it to me" types, you could refer them to Durando vs. U.S., or also PLR 8716060.

Once they look at this, I don't get any further arguments (yet, anyway.)