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Old 07-28-2016, 10:48 PM
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Payroll and 401K questions on S-corp

Hi,
Recently i opened a S-corp, My wife and myself have equal share on this.
I am planning run payroll on her name. Annul company turnover around 50k +.

1. How much percentage do i need to run a payroll to avoid a IRS audits?
2. How much company can match on 401k plan for wife ?
Ex: if she contribute 18k per year, can company also match 18K ?


Thanks in Advance



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Old 10-28-2016, 03:04 PM
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Join Date: Oct 2016
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You need to pay both of you a reasonable salary. The reasonable salary is not based on a percentage of S-corp earnings and profits it is based on what other people doing similar work are paid.

401(k) profit sharing is capped at 25% of wages paid.



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