One Man 401k/Cash Balance

I have a one man 401(k) Plan where they are looking to put in a Cash Balance Plan as well.  If the owner makes $165k, the maximim Profit Sharing contribution would be 6%, correct?

So they could do $19,500 in 401(k) + 6% of Comp + $108k into Cash Balance (he's 42-years old)?

Is there anyway to get the contribution to be more than 6% into PS?

If the plan has provisions to allow Voluntary after tax (nondeductible) contributions, they are not subject to the 6% deduction limit (they’re not deducted). They still count toward the 415 limit, of course. 

Exactly - so no deduction, but could do VAT up to 415 limit, do an in-plan Roth conversion (plan document needs to have Roth provisions) and then voila, you have your back-door Roth that everyone seems to be clamoring for these days. This is one of the rare instances it works (owner/HCE only plans). And at age 42, I would say there is certainly value for the owner in Roth.

Thanks everyone!!  The client asked if the VAT needs to appear on the W2 and how they should be deducted?

Thanks in advance!

Voluntary AFTER Tax are not deducted. Hence the name after tax. The employee pays tax on them. The employer gets a deduction as they are part of the employee wages.

They are not required to be reported on a W-2, but they can be reported in Box 14 for informational purposes.

10 minutes ago, Lou S. said:

Voluntary AFTER Tax are not deducted. Hence the name after tax. The employee pays tax on them. The employer gets a deduction as they are part of the employee wages.

They are not required to be reported on a W-2, but they can be reported in Box 14 for informational purposes.

 

Great, thanks!!!

I actually thought you were asking how they were deducted from payroll, which is doable but not actually mandatory.