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M
mdcdeve
July 1, 2024
Question

Deducting Employer Profit sharing Contributions

  • July 1, 2024
  • 1 reply
  • 0 views

Hi, i have a sole proprietorship where i am the employer and employee.

 

I maxed out my Roth IRA Contributions.

 

But i also invested my maximum allowed Employer Matching (Profit Sharing) Contributions which is $27,000, how do i deduct this amount from the taxable income?

 

The maximum allowed contributions for 2023 is $66,000, and the employer matching can only be a traditional IRA so it should be tax deductible. Thanks!

    1 reply

    M
    Mike9241
    July 1, 2024

    what type of retirement plan? whether you are also considered an employee depends on the type of plan. for some only a person getting a w-2 and thus only their wages count for pueposes of retirement plan contributions

     

    M
    mdcdeveAuthor
    July 1, 2024

    Hi, thanks for the reply! It's a 401k with 22,500 roth ira employee 401k and 43500 traditional ira employer profit sharing 401k. It's with Vanguard and i'm the employer and employee and contribute to both.

     

    If it can't be deducted does that mean it'll be taxed twice?

    M
    mdcdeveAuthor
    July 4, 2024

    Hi, thanks for the reply! It's a 401k with 22,500 roth ira employee 401k and 43500 traditional ira employer profit sharing 401k. It's with Vanguard and i'm the employer and employee and contribute to both.

     

    If it can't be deducted does that mean it'll be taxed twice?

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