The Tax Book Page 20-17 line 18

[Bjorn]

I'm trying to figure out how the number 7088 got on that line.

Would it just be the $1,088.00 since that must be the employee match?

I bet I missed the boat on this one. Please throw me the life jacket before.

Mahalo.

Bjorn

[Brad Imsdahl]

TTB, page 20-17:

Line 9, wages for employees equals $30,260, which is made up of gross wages to employees ($36,260) minus SIMPLE elective deferrals ($6,000).

Line 18, retirement plans equals $7,088, which is made up of employee SIMPLE elective deferrals ($6,000) plus employer matching contributions ($1,088).

The 1065 instructions for line 9 includes the following:

“Do not include salaries and wages
reported elsewhere on the return, such as
amounts included in cost of goods sold,
elective contributions to a section 401(k)
cash or deferred arrangement, or amounts
contributed under a salary reduction SEP
agreement or a SIMPLE IRA plan.”

The 1065 instructions for line 18 includes the following:

“Enter the deductible contributions not
claimed elsewhere on the return made by
the partnership for its common-law
employees under a qualified pension,
profit-sharing, annuity, or SEP or SIMPLE
IRA plan, and under any other deferred
compensation plan.”

That is why the elective deferrals are included on line 18 as a deduction for retirement plan contributions rather than on line 9 as gross wages.

[Bjorn]

Good Explanation

That is why you write The Tax Book and I buy the tax book, many of them.

Mahalo.