Self-Employed income & contribution limits

Per CPA of a married couple's plan, for self-employed, 415 contribution limit is apparently based on 'Total Income'. Total Income includes Wages and items on Schedule E such as rental and passthrough, as well as Schedule D for cap gains. The amount that was contributed for the plan exceeded what was determined to be Wages. Self-Employment tax was based on the full Total Income, can contributions as well? I hadn't seen that before. In this case it exceeds what was assigned as Wages.

You might want to try clarifying your post; maybe it's me but I'm confused.  You talk about self-employed, but also wages.  Is one an employee and one self-employed?  Generally I wouldn't consider rental income (passive) to be self-employment income.  We are generally working from Schedule C info or a K-1 for a partnership and don't care about Schedule E.  I can say with some certainty that capital gains are NOT included in any plan income calcs, nor self-employment tax calcs, so either the accountant is confused or there is a failure to communicate.  One suggestion is to ask for the Schedule SE calc (there is no line for pass-through from  Schedules E or D, and while wages are an input they are a potential adjustment (down) in the calc.  

In any event a CPA does not tell me what 415 contributions are based on.

Agree - very confusing post. Generally, if an item is "earned income" and subject to SECA then it can count toward retirement plan compensation. However, just because someone counts something for SECA doesn't mean it was done properly (like rents or capital gains) and should be considered compensation. Darrin Watson has a GREAT ASPPA webcast session on Earned Income which has been recorded and which I highly recommend to anyone who deals with small plans for self-employed people.

2 hours ago, CuseFan said:

Darrin Watson has a GREAT ASPPA webcast session on Earned Income which has been recorded and which I highly recommend to anyone who deals with small plans for self-employed people.

Do you have a link to it?

It's in the ASPPA member education section - you need to have an ASPPA account to access and it's not a free session unless you have the ABG affiliation for free on-demand access to recorded sessions - at least that is how I came across it.

I'll take a look