Question about SEP IRA for S-Corp


C

cmay

I know there are percentage limits on the SEP IRA for what someone can
contribute.

With my S-Corp, I pay myself a salary, and the rest of the profits are
paid out as a distribution (I am the only shareholder).

Would my % limit be based on my salary, or on my salary+distributions?

Thanks.
 
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K

kastnna

I know there are percentage limits on the SEP IRA for what someone can
contribute.

With my S-Corp, I pay myself a salary, and the rest of the profits are
paid out as a distribution (I am the only shareholder).

Would my % limit be based on my salary, or on my salary+distributions?

Thanks.
I believe that k-1 earnings are not includable in the calculation,
only EARNED income. [Note: That's the IRS definition of earned. I'm
betting you "earned" every penny.]

Are (or your spouse) the only employee of the company?
 

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