I would like to know what are the employer contribution limits to these plans, and specifically how contributions to one plan impact the other.
Here is the scenario:
- I own a business (LLC with S-corp election)
- I contribute my maximum as an employee to my 401k
- I contribute the maximum deductible amount as an employer (25% of W2 salary) to my 401k
- I would also like to contribute as much as possible to a new defined benefit plan
I know that the value allowed to contribute to a defined benefit plan depends on several factors (age, target benefit, etc.) and is determined by an actuary. However let's suppose for sake of argument that my calculated employer contribution requirement for #4 is 100% of my W2 salary in the current tax year.
My question is: in this scenario, will the employer contribution in #3 reduce or somehow impact the amount I can contribute as an employer in #4? Would the entire amount in #4 (100% of W2 salary) be deductible as a business expense in this scenario?