Experts S Corp W-2

[peanut]

Lets assume a S Corp pays its 100% shareholder (only employee ) $ 50,000 of that amount $ 20000 is contributed to a one man 401 K plan. The Corp also puts $ 3000 in a HSA plan and also pays $ 5000 in health insurance for the shareholder employee. It is assumed that the health Insurance qualifies as a plan( rules have been liberalized by the recent ruling). What amount should show in box 1, box 3 & 5 and box 12. It would be my understanding Box 1 should be 50000-20000+ 5000 or $ 35000. Box 3 & 5 should be $ 50000. Box 12 should show the $ 20,000 401 K contribution and also according to the instructions a w should be entered for the HSA plan contribution. Now assuming the corp wants to make a maximum SEP contribution ---- is it 25% of Box 1 or $ 35000 . In other words can you use the $ 5000 health insurance premiums to maximize the SEP contribution. What amount do you calculate the SEP contribution on?
Thanks

[KJ Judd]

Box 1 wages should also include the HSA contribution as he is >2% shareholder. So wages are $50k-20k (401k plan)+$3k (HSA) + $5k (health ins) = $38k. The shareholder then gets the $3k HSA and $5k health insurance deductions on Form 1040 page 1 assuming all the other requirements are met.

I agree with your Box 3 & 5 of $50k.

You calculate the SEP on Box 1 income (although I have not encountered a 401k plan deferral in addition to HSA & health insurance.) And yes, the HSA and health insurance contributions increase compensation for calculating a SEP contribution. Sorry I can't lay my hands on the cite for this at the moment.