® PLAN ONE Contribution Calculation Worksheet (Sole Proprietors) The maximum contribution into a PLAN4ONE® individual 401(k) retirement plan is comprised of two elements, the profit sharing and the 401(k) deferral. The maximum allowable contribution calculation simply takes the profit sharing contribution and adds the maximum 401(k) contribution amount to it to obtain the total allowable contribution. If you are 50 years old or more, then you can also defer an additional amount of your salary (see 401(k) Employee Deferral Limits table below). Net Profit $ Step 1: minus (1/2 of your Self Employment Tax) $( ) Determine your Modified Net Profit* Modified Net Profit (MNP) $ This figure can range from $0 up to the 401(k) Step 2: contribution limit for that year, not to exceed 100% of Determine your maximum employee your MNP. Please see the 401(k) Employee Deferral $ deferral 401(k) contribution Limits chart (below). MNP (from Step 1) $ Step 3: Determine your maximum profit sharing X 20% contribution Maximum profit sharing contribution $ Maximum profit sharing contribution $ Step 4: (from Step 3) Calculate your maximum PLAN4ONE® individual 401(k) contribution plus maximum 401(k) employee deferral $ contribution (from Step 2) The total of the employee and employer contributions provide you with the total maximum PLAN4ONE® Maximum PLAN4ONE® individual 401(k) $ individual 401(k) contribution contribution * For 2009, the maximum salary that can be used for determining plan contributions is $245,000. * For unincorporated business owners, estimate your Net Profit from business (Schedule C, Schedule C-EZ, Schedule F, or Schedule K-1 of your Form 1040. If you are a general partner in a partnership, reduce your Net Profit by any Section 179 expense deduction claimed, un-reimbursed partnership expenses claimed, and depletion claimed on oil and gas properties). EXAMPLE: Jack is a 42 year-old consultant who has realized $100,000 in net profit in fiscal year 2009. He has started a PLAN4ONE® individual 401(k) retirement plan and has calculated his maximum PLAN4ONE® individual 401(k) contribution for 2009. Here is the detail of Jack’s calculation: Step 1: Determine maximum employee deferral contribution $16,500 Step 2: Determine Modified Net Profit $100,000 – ($14,129 * ½) = $92,935 Step 3: Determine your maximum profit sharing contribution $92,935 x 20% = $18,587.00 Step 4: Calculate the total maximum PLAN4ONE® individual 401(k) contribution $18,587.00 + $16,500 = $35,087.00 * The self-employment tax is an estimate used for demonstrative purposes only. 401(k) Employee Deferral Limits: 401(k) Under 50 50 Years Old Year Deferral Limit Catch Up * Years Old and Over 2009 $16,500 $5,500 $16,500 $22,000 2008 $15,500 $5,000 $15,500 $20,500 2007 $15,500 $5,000 $15,500 $20,500 2006 $15,000 $5,000 $15,000 $20,000 2005 $14,000 $4,000 $14,000 $18,000 *Employee Catch Up Contributions explained: The purpose of a catch up contribution is to allow any individual 50 years and older to fund an additional amount into their 401(k) account, above the 401(k) Deferral Limit, out of their own salary. If you turn 50 within any of the years listed above, or are 50 years or older currently, you will be able to defer the maximum 401(k) Deferral Limit plus the catch up amount for that year. NOTE: the information provided above in the calculations, worksheets, examples and charts are based on information by sources that we believe to be reliable and accurate. We encourage you to check with your CPA or Tax Advisor to determine your actual calculations.
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