Safeharbor29 Posted May 15, 2015 Posted May 15, 2015 If a plan's definition of compensation is simplified 415 and a new owners compensation is K1, does a change in compensation need to be made? If so, which one?
ETA Consulting LLC Posted May 15, 2015 Posted May 15, 2015 No. The Basic Plan Document will, typically, state that regardless of the selection made between W-2, Withholding, and 415 Safe Harbor, the compensation for a 'self-employed' individual is 'earned income from self-employment'. Okay, now you're like... Huh???....The key here is that when you have an owner of a business that is not incorporated, and he is therefore not receiving a W-2, then his income is determined from the profits of the business (i.e. K-1, Net Schedule C). Good Luck! Earl 1 CPC, QPA, QKA, TGPC, ERPA
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