If you have a self-employed 401(k) can you deduct the profit-sharing contribution on Schedule C, line 19. At first glance the answer is no as publication 560 says
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Deduct the contributions you make for your common-law employees on your tax return. For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120, or Form 1120S.
Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership.)
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Lots of stuff I read on the internet confirms this.
But there is also a form 5500-EZ, and the existence of this form suggests that profit sharing to a plan with one employee is allowed. Towards the end of chapter 4 they write:
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Form 5500-EZ. You may be able to use Form 5500-EZ if the plan is a one-participant plan, as defined below.
One-participant plan. Your plan is a one-participant plan if either of the following is true.
The plan covers only you (or you and your spouse) and you (or you and your spouse) own the entire business (whether incorporated or unincorporated).
The plan covers only one or more partners (or partner(s) and spouse(s)) in a business partnership.
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So the first question is whether sole proprietors can deduct the profit sharing on Schedule C, thereby reducing the FICA tax.
Second, if the answer is no, could money be saved by using an S Corp? Common sense tell me no as then there is a major tax advantage of one type of entity. I'm guessing that if the S Corp deducts the profit sharing contribution to a retirement plan, that profit sharing contribution is included in the employee's W-2.