.container-fluid.wrapper.ec-for-dbf-wrapper .main-banner { background-size: cover !important;} @media screen and (max-width: 600px) { .container-fluid.wrapper.ec-for-dbf-wrapper .main-banner { width: 100%; min-height: 80px; background: #82939b url('https://02b46b8a.flyingcdn.com/wp-content/uploads/images/thin-headers/phone/thin-header-phone-grey.png') no-repeat !important; padding: 40px; } .container-fluid.wrapper .main-banner .content-wrapper h1 { font-weight: 300; font-size: 50px; margin: auto; line-height: 125%; } }

Eligible Compensation for Defined Benefit Plans

Type of business entity determines what can be counted as compensation in calculating the contribution amounts for a Defined Benefit plan.

COMPENSATION QUICK REFERENCE CHART

    • Entity Type
    • Corporation
    • S-Corporation
    • Sole Proprietorship
    • Partnership
    • Source of Income
    • W-2 Income
    • W-2 + Schedule K-1
    • Net Profit
    • Net Profit
    • Compensation for plan
    • W-2 Income
    • W-2 Income Only
    • Earned Income (Calculate) * Schedule C, Line 31
    • Earned Income (Calculate) * Schedule K-1, Line 14a

Limited Liability Company (LLC) — compensation for plan depends on how LLC is taxed. See above for partnership or corporation rules.

Employees, other than owners, are paid W-2 income for all entity types.

Earned income = net profit (line 31 of the Schedule C as a sole proprietor or line 14a of the Schedule K-1 as a partnership) minus ½ self-employment tax minus plan contribution. Deductions for sole proprietors or partnerships are limited to net profit minus ½ self-employment tax.

Quick Links

© 2024 Dedicated Defined Benefit Services, part of FuturePlan by Ascensus. All Rights Reserved.

OnePersonPlus is a registered trademark of Dedicated Defined Benefit Services.

Estimate contribution and deduction with our DB calculator Try it now

Call: 866-269-2706