Simple IRA

[Acownt4it]

I am having a disagreement with my client's financial advisor as far as what is considered compensation for a "self-employed Individual". We can't agree on what the company 3% match should be calculated on.

My client is a sole shareholder of an S-Corp. His gross payroll for the year is $25,000 (this includes the $10,500 simple Ira contribution). He is a seasonal company.
The company has a profit of $50,000 before the company match of 3% to the S-IRA.

The CFP is telling me that he calculated the company 3% match on $50,000; so an additional $1500.

I read the rules that the 3% match is on wages of $25,000; or $750 match.

Which way is correct?

[Bees Knees]

Wages

The K-1 line 1 profits for an S Corp shareholder are NEVER used for pension contribution purposes.

[veritas]

You are

See, This is what Sea-Tax and I have been talking about. Get your securities license and no more idiot advisors to deal with.

On another note, you know those calls you get from someone in NY City with that irritating accent telling you about some awesome bond or stock? It's really fun to tell them you are security licensed.

[Acownt4it]

I may have to do that. I argue with this guy every year and my client won't change his advisor. Makes me crazy(er)!.
Thanks for your help.
Merry Christmas

[JoshinNC]

Hey Veritas, you forgot me!

See, This is what Sea-Tax and I have been talking about. Get your securities license and no more idiot advisors to deal with.

On another note, you know those calls you get from someone in NY City with that irritating accent telling you about some awesome bond or stock? It's really fun to tell them you are security licensed.

I've been singing the virtues of security licensing for a year and a half on this board, ever since I got licensed. Added $50,000 to my total revenue this year, easy!

[veritas]

Sorry

......................

[sea-tax]

I've been singing the virtues of security licensing for a year and a half on this board, ever since I got licensed. Added $50,000 to my total revenue this year, easy!

Now boy's don't get all hissy with each other lest we make outsiders think that all financial advisers are self-absorbed dodos.

I must agree with Veritas and Josh, if you are in a practice where by you get many phone calls in regards to tax implications of retirement and investment options and you are not licensed then you have simply missed the boat.

You are doing your clients a dis-service and well as yourself. Seriously think about being licensed.

And as one famous dodo once said " that's all I have to say about that".

[geekgirldany]

That is what happened to me a few months ago. Advisor said it was on gross income of S-Corp not actual W-2 earnings. Mess.

I've found more and more people wanting to know about retirement plans. I don't even know anyone local to recommend them to. Would be a great addition to my practice as I have been told by Josh and others