what options available to s-corp for retirement plans?

[belashah6]

can s-corp set up SEPIRA plan and 401(k) plan together.I heard that due to recent changes,they are allowed to contribute in both retirement plans.If yes, on what amt we suppose to pay social security tax and medicare tax as corporate and as an employee?...where can I find this info?

[digdowndeepnseattle]

No need for a SEP. Set up a 401(k) with a profit sharing feature and your accounts are consolidated. The benefit of the S-CORP is to eliminate the employer portion of the social security tax on that portion of your income that is taken as a draw instead of wages. So, you defer 15,000 of income which leaves you 30,000 of profit sharing to go in order to get the maximum of $45,000 (I rounded to nearest 1k for simplicity). That means you only need to take $165,000 in salary to be able to deduct the entire $45,000 in contributions. Any income you make above that figure you take in draws in order to avoid the extra tax.

You can find this info at your local CPA. I'd hire a TPA for the 401k plan though...certainly worth the extra effort and expense to ensure your plan is compliant with the IRS.

[southron2002]

You can do a ROTH.

Of course all this will be moot when the FairTax Act H.R. 25 passes and replaces all income taxes with a single sales tax on new items. The FairTax now has the support of hundreds of thousands, 72 congressional sponsors / co-sponsors, and 7 presidential candidates. See www.fairtax.org
Fundamentals and facts http://www.fairtax.org/PDF/FairTax-Fundamentals_and_facts-070122.pdf
Frequently Asked Questions about the FairTax http://www.fairtax.org/site/PageServer?pagename=about_faq