FAQ 209: Budget--Enter Schedule C income for a sole prop budget

Problem: I have a new 401k safe harbor plan using the basic safe harbor match. The employer will not be making a profit sharing contribution. The employer is self-employed (Schedule C) with three non-owner employees. How and where do I code the owners net self employment earnings in order for ASC to calculate the owner's safe harbor match? The owner has contributed $13,000 in salary deferrals. I expect her earned income, after all deductions including the employees safe harbor match to be about $180,000. Thanks.

Solution: You would still use the budget routine, entering the Schedule C income amount in the "Budget Amount" field in the budget setup screen. You would uncheck the box next to the Employer source on the budget setup screen so that no contribution is calculated for the profit sharing. Make sure you have the safe harbor match coded in the match source and the system will take care of the rest within the budget routine. The budget documentation can also be downloaded from our website for additional reference.