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Retirement Plans For S Corp Owners In Suffolk
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State:
Multi-State
County:
Suffolk
Control #:
US-001HB
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FAQ
For 2023, the total contribution limit for all S Corporation, elective deferrals and non-elective contributions combined into a 401(k) plan is $66,000—which is a major chunk of change to be able to shield from federal income taxes, so long as your salary is considered reasonable.
The basic limit on elective deferrals is $23,000 in 2024, $22,500 in 2023, $20,500 in 2022, $19,500 in 2020 and 2021, and $19,000 in 2019, or 100% of the employee's compensation, whichever is less.
Now that you are an S Corp, a Solo401K is usually the best retirement plan option. This is because the contribution limits are much higher than other retirement plans (Traditional IRA, Roth IRA).
Solo 401(k) Maximums 401(k) Contribution Limit for 2025Amount Deferral for under age 50 $23,500 Deferral for age 50+ $31,000 Maximum for under age 50 $70,000 Maximum for age 50+ $77,500
How much can an S Corp contribute to a SEP IRA? The contribution limits are straightforward. You can contribute up to the annual maximum or 25% of your annual compensation, whichever is less. If you have eligible employees, you must make the same percentage contributions to their account as well.
401(k) plan contributions If you are a common-law employee of the S corporation: you can make salary deferral contributions to the 401(k) plan based on your Form W-2 compensation; and. your employer can make matching or nonelective contributions to the plan based on your Form W-2 compensation as a common-law employee.
What about single-member S-corps? Single-member S-corporations can establish a solo 401(k) plan, also known as a one-participant 401(k) plan. This plan allows the owner to make both employee and employer contributions.
Total contributions to a participant's account, not counting catch-up contributions for those age 50 and over, cannot exceed $69,000 for 2024 ($66,000 for 2023; $61,000 for 2022; $58,000 for 2021; $57,000 for 2020). Example: Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2020.