Contribution limits to Small Business Owner Help

[kpangelinan]

Can someone point me to an IRS pub that describes Small Business Owner 401(k)s (aka. SBO-401(k), solo-401(k), individual 401(k)) such as contribution limits, etc?

This person is a single owner of a C-Corporation. He's the only employee. His salary from the C-Corp is over $150k a year.

Also, if he's a sole prop, can he max out limits on both his sole prop and c-corp?

Any help would be appreciated. Thanks,

[appelman]

I don't think there is a Pub.

I believe it's basically taking the current 401(k) rules and applying them to a solo plan.

As I understand it, the total contribution limit is $49,000, plus a catch-up contribution of $5500 if age 50 or over, but altogether not more than 100% of compensation. Out of this the salary deferral contribution is limited to 100% of the first $16,500 of compensation ($22,000 if age 50 or over), and the profit-sharing contribution for incorporated businesses is limited to 25% of W-2 income.

[BHoffman]

Will this help? It's a worksheet for 2009, but I think the limits are the same for 2010. This worksheet is for a sole proprietor with a solo 401K, not a C-Corp. It references Pub 560 for more info.

Worksheet:

https://www.fidelity.com/static/dcle/ira/documents/401K-CW-0902.pdf

Pub 560:

http://www.irs.gov/publications/p560/index.html