Reporting deferred compensation on quarterly Form 941


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botony

I am the sole employee of my S corporation. I recently set
up a solo 401 (k) plan.

Part of the 401 (k) plan allows me to defer up to $18,000 of
my salary. In the words of one website, "The salary deferral
contributions are withheld from your pay and are excluded
from federal income tax but are subject to FICA. The
business receives a tax deduction for both salary
deferral.."

(I presume Medicare is also paid on the deferral.)

My question is - do I report the salary deferral on Line 2
of the 941? If not, then, how do I make a handle the 12.4%
for FICA (line 6A) and the 2.9% for Medicare (line 7A) that
I need to pay?

Thanks in advance for any help.
 
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Paul A Thomas

I am the sole employee of my S corporation. I recently set
up a solo 401 (k) plan.

Part of the 401 (k) plan allows me to defer up to $18,000 of
my salary. In the words of one website, "The salary deferral
contributions are withheld from your pay and are excluded
from federal income tax but are subject to FICA. The
business receives a tax deduction for both salary
deferral.."

(I presume Medicare is also paid on the deferral.)
Yes, Social and Medicare both apply to the 401K contribution.
My question is - do I report the salary deferral on Line 2
of the 941?
Line 2, no.
If not, then, how do I make a handle the 12.4%
for FICA (line 6A) and the 2.9% for Medicare
(line 7A) that I need to pay?
You must have a different Form 941 than me, but the lines
that report Taxable Social Security Wages (Line 5a on my
form) and Taxable Medicare Wages & Tips (Line 5c on my form)
include the total gross wages (before the 401K deduction).

You should have software to handle this (makes it more
efficient).
 
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P

Phil Marti

I am the sole employee of my S corporation. I recently set
up a solo 401 (k) plan.

Part of the 401 (k) plan allows me to defer up to $18,000 of
my salary. In the words of one website, "The salary deferral
contributions are withheld from your pay and are excluded
from federal income tax but are subject to FICA. The
business receives a tax deduction for both salary
deferral.."

(I presume Medicare is also paid on the deferral.)
Correct

My question is - do I report the salary deferral on Line 2
of the 941?
I'm not quite sure what you mean. Line 2 is gross wages
without any adjustment for 401(k) contributions.
If not, then, how do I make a handle the 12.4%
for FICA (line 6A) and the 2.9% for Medicare (line 7A) that
I need to pay?
Lines 5a and 5c are the FICA/Medicare taxable wages.
 
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B

botony

I'm not quite sure what you mean. Line 2 is gross wages
without any adjustment for 401(k) contributions.
Lines 5a and 5c are the FICA/Medicare taxable wages.
Thank you for your replies.

Let me attempt to ask my question more clearly:

Does Line 2 of Form 941 (Total wages and tips, plus other
compensation) include deferred compensation?

I read the answer that Line 2 does not include "adjustments"
for 401 (k) plans. I presume, then, that you are considering
the salary deferral to be an "adjustment".

Thank you again for your responses.
 
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