FAQ 704: Budget--Budget calculation removing compensation


We are trying to use the budget calc to calc the safe harbor match for a sole Prop. The only participants are the owner and his wife. The budget routine keeps removing her compensation. Why?


If both the husband and wife are owners, it should be coded as a partnership, not a sole prop. If only the husband is the owner, then the wife should not have any ownership coded nor should she be coded as a principal. The comp entered in the COMP screen is only removed as the budget begins if they are coded as a principal/owner of the firm. This is because their Schedule C or Partnership income is input into the budget and calculated with the contribution.