FAQ 704: Budget--Budget calculation removing compensation

Problem: 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?

Solution: 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.