2012 self-employed calculations

[Belgarath]

Just playing with my spreadsheet. While I realize that different spreadsheets may be off by a dollar or so due to rounding, I get a Schedule C income of $260,310 required to get the $250,000 comp maximum after SE tax reduction. (unrounded it gives me $249,999.82)

Taking into account maximum 401(k) deferrals, for a S/E to get the 415 maximum $50,000 account addition, I get a required Schedule C comp of $174,157.

Anyone getting anything different?

[Mike Preston]

I get $260,536 for the first number and $176,917. Maybe my spreadsheet has a bug?

[Bird]

Assuming we're talking about 2012...(edit: yes I see we are!)

I get $260,312 (I do not adjust for the 2% reduction in SS taxes that may or may not be appropriate). (I'd quibble that the resulting $250K doesn't mean anything because it would be further reduced by any 'er contributions...I guess if you're calc'ing a 401(k) % it has some meaning.)

I get $174,157 for the second one.

[Mike Preston]

I think this issue has been laid out in prior discussions. The Congress changed the Self Employment calculation when the 2% was removed to have the net result be the same as it was before the 2% was removed. Basically, go back to 2010's spreadsheet, but use the current years SSWB. If BenefitsLink can search on numbers, look for threads that have 59.6% in them.

[Belgarath]

Hi Mike - interestingly, when searching prior thread on this, your post as of January 17 in the 401(k) forum came up with $260,310.19 for 2012, to get to the $250,000. What did you change between then and now, and why?

[Mike Preston]

My apologies, despite the thread name and the confirmation in one post that this calculation was for 2012, I was doing my calculation based on 2013. Sorry for the confusion.

[Belgarath]

No problem! I regularly mix up my years until at least May of every year anyway.