Over 404 but not 415 limit

[pensionam]

I have a client who has already filed their corporate tax return and is over the 404 limit.  I've never ran into this situation before but after doing further research, it appears as though they need to amend their corporate tax return as well as pay a 10% excise tax on the amount they went over by.  They are a calendar year plan so the plan year we are working on right now is 2017.  Unfortunately, all of the Profit Sharing contribution was deposited in 2017.  The part I'm getting hung up on is what happens with the overage.  Does it get applied to the 2018 plan year or does it have to be applied to 2017 since although it's over the 404 limit, it wouldn't be over the 415 limit?  If it has to be applied to 2017, can they still take the deduction in 2018 since they weren't able to for 2017?

[ETA Consulting LLC]

It's still a 2017 Contribution as it did not exceed the 415 or any "Plan" limit.  You'd merely take a deduction in 2018 (and each subsequent year until the overage is exhausted).

Good Luck!

[pensionam]

Thank you so much, I really appreciate the response!

[Mike Preston]

The answer might change if there is a DB plan in play.  Is there?  Also, has the client been told that making substantial profit sharing contributions before the end of the year is a disease that can be eradicated by delaying anything that MIGHT not be deductible until the day after the close of the plan year?  Clients frequently don't like hearing that when there is a commission-hungry advisor who has their ear.  Those advisors do NOT have the client's best interests in mind.

[jpod]

Oh no, Mike, please say it ain't so! 

[jpod]

Quote

 

And it's not just the commission on that sale, it's the extra bump up on the grid before the year ends.

[pensionam]

Thanks for the input.  They only have a Profit Sharing only plan.  I have reiterated to them on more than one occasion that the deposit should not be made until our office has done the calculation or at least after 12/31 since they don't understand how the calculation works.  Very frustrating when a client doesn't listen to your advice, that's for sure!