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 has 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.

[Kimberly S]

If the S corp. income is on a W-2 it can be counted for plan purposes. If it's investment income, it cannot.

[austin3515]

In other words, the K-1 income is out - you can count solely W-2 income. The distinction from partnerships is that the Corporation is considered a separate entity from it's owner, whereas a partnership is comprised of individuals as partners, not distinct from the enttity iteslf. Thereofre, in a partnership, the partnership's income is the partner's income (at tleast their pro-rata share).