Re. new SE-401K account for a single-person LLC with no other employees (which is treated as a Schedule C business) where a separate bank account is maintained, where no compensation other than expense reimbursements was disbursed from LLC account to the owner.
If the SE-401K plan is setup on, e.g., on 12/1/2012 and nothing is backdated (including the annual salary reduction form ), is there any IRS requirement to compute the exact Schedule C profit at the creation date so that either the max deferral (e.g. 17K for 2012) or the profit sharing amount (25%) is only based on the net income from 12/1 -12/31??
The instructions from Fidelity say "... compensation means earned income." and "... Under no circumstances may a salary deferral election apply to compensation you have already received", but if no funds from the LLC are used/disbursed for personal use, do they really mean you need to compute your Schedule C profit on the specific date to adjust the max contribution amounts?
Also, on another page Fidelity has a "TIP" in that they say to back date the forms to Jan 1 so you can contribute the max? Is this needed?
E.g. worst case example, LLC received various incoming payments throughout the year, pays office rent, travel expenses, pays several contractors, buys depreciable items, etc (no payments to owner). Plan is setup 12/1, owner goes on vacation for December (no more accounts payable received). Can any SE-401K deferral/salary reduction or profit component (25%) be put in the 401K for 2012 if he starts the plan on 12/1 and elects 100% of compensation be deferred on his salary reduction form?