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A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Elective salary deferrals are excluded from the employee's taxable income (except for designated Roth deferrals). Employers can contribute to employees' accounts.
Tax Advantages for the Corporation and Employees For employees, 401(k) contributions are made pre-tax, reducing their taxable income for the year. For the S Corp, employer contributions to the plan are tax-deductible, reducing its taxable income 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.
Your employer (profit-sharing) contributions will appear on Line 17 of IRS form 1120S.
Your employer (profit-sharing) contributions will appear on Line 17 of IRS form 1120S. You only need to report the pre-tax (traditional) solo 401k contributions.