S-Corp, W-2, 401k and match deposits

The sole owner of an S-Corp is depositing 401k and safe harbor match every 2 weeks.  His W-2 for 2024 supports his contributions.  I'm fuzzy on this part...  I was told that the payroll company processed a one-off payroll for $75,000 on 12/27/2024 in order to support his 2024 contributions.  His W-2 showed $75,000 in total compensation and a $30,500 401k contribution.  The CPA tells me it's ok because the IRS just wants to see that a W-2 at the end of the year supports the contributions.  Is an S-Corp owner not issued an official paycheck each pay period with the various payroll taxes deducted for that pay period?  The CPA said it's better from a tax perspective to run one payroll at the end of the year so that the W-2 supports the owner's contributions and the W-2 reports reasonable taxable compensation.  Maybe this is semantics but I don't understand how a paycheck isn't process for an S-Corp owner throughout a year and one can be run at the end of the year to report W-2 compensation for the prior 12 months.  Is this ok?

An owner can pay himself on whatever schedule he desires. 

1 hour ago, Bill Presson said:

An owner can pay himself on whatever schedule he desires. 

And can make a 401k contribution and match every 2 weeks even if the owner doesn't take w-2 compensation until the end of the year?  Maybe what I'm missing is that at that an owner pays himself however much he wants to, whenever, and at the end of the year the w-2 is whatever it needs to be to be reasonable.

1 hour ago, LMK TPA said:

And can make a 401k contribution and match every 2 weeks even if the owner doesn't take w-2 compensation until the end of the year?  Maybe what I'm missing is that at that an owner pays himself however much he wants to, whenever, and at the end of the year the w-2 is whatever it needs to be to be reasonable.

I would prefer the deposits happen concurrent with the paycheck. But pre funding contributions happens and, as long as it doesn’t affect the year in which the dollars are deducted, is wholly irrelevant in an owner only plan. 
 

1 hour ago, Bill Presson said:

I would prefer the deposits happen concurrent with the paycheck. But pre funding contributions happens and, as long as it doesn’t affect the year in which the dollars are deducted, is wholly irrelevant in an owner only plan. 
 

 

Thank you, I appreciate your responses!  If there are employees though and the document says the match is calculated on a per pay period basis, would you say that's an issue?  

50 minutes ago, LMK TPA said:

Thank you, I appreciate your responses!  If there are employees though and the document says the match is calculated on a per pay period basis, would you say that's an issue?  

Absolutely. 

For sole proprietorships and partnerships, the owners are allowed to make deferrals against any draw they take from the business.  All of the income from self-employment and deferrals are considered to be determined as of year.

S-corp shareholders typically get W-2 income and S-corp dividends.  The S-corp dividends are not considered compensation for purposes of the plan. Conceivably, the IRS could say that if payments made during the year that were not from amounts subject to taxation when paid, then salary deferrals cannot be taken from those payments.

I haven't seen this situation, so this is just my thoughts.