We're trying to compute the maximum allowable contributions for my wife's SIMPLE. She was self-employed with no other employees.
I thought I read in the IRS pubs that she could defer up to the amount of her net income (gross - 7.65%, assuming no other deductions). The company is supposed to kick in a 3% match.
Example: Gross income $1000, net income 0.9235 x $1000, or $923.50 (no business deductions). She deferred all $923.50 and THEN we added in the 3% employer match.
TaxCut is suggesting we put in too much. Is that the case?
I thought I read in the IRS pubs that she could defer up to the amount of her net income (gross - 7.65%, assuming no other deductions). The company is supposed to kick in a 3% match.
Example: Gross income $1000, net income 0.9235 x $1000, or $923.50 (no business deductions). She deferred all $923.50 and THEN we added in the 3% employer match.
TaxCut is suggesting we put in too much. Is that the case?