ILLMAS Posted July 11, 2016 Report Share Posted July 11, 2016 I was caught off guard by a fellow accountant, she has a client that is the only employee in a S-corporation, the corporation pays the shareholders/owner health insurance premium, then it's added back into her salary. The questions was, should the company's SEP contribution be based on the regular salary or should it also include the additional salary that covers the health insurance premium? Thanks https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-contributions Quote Link to comment Share on other sites More sharing options...
FDNY Posted July 11, 2016 Report Share Posted July 11, 2016 I believe it would be based on box 1 wages, which is the shareholder's compensation, as I read the pub referring to in applying the percentage. 2 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted July 11, 2016 Report Share Posted July 11, 2016 I use box 1 wages as well, even if it includes health insurance premiums. It's all compensation. 3 Quote Link to comment Share on other sites More sharing options...
Randall Posted July 12, 2016 Report Share Posted July 12, 2016 I don't have a reference off hand, but I thought it was limited to Medicare wages. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted July 12, 2016 Report Share Posted July 12, 2016 35 minutes ago, Randall said: I don't have a reference off hand, but I thought it was limited to Medicare wages. Sounds like box 1 wages to me: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-compensation Quote Link to comment Share on other sites More sharing options...
Randall Posted July 12, 2016 Report Share Posted July 12, 2016 2 hours ago, Abby Normal said: Sounds like box 1 wages to me: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-compensation I'm probably thinking of the SE health insurance deduction (limited to medicare wages). 1 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted July 18, 2016 Report Share Posted July 18, 2016 Box 1 wages as I read the pub, which, I have also done. Quote Link to comment Share on other sites More sharing options...
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