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Earned Income: a Practical Approach
Presentor: Derrin Watson Recorded Date: 1/26/2016 Duration: 100 Min.

This program was recorded during a live presentation given on January 26, 2016 at 12:00PM EST.

At this time of year many administrators find themselves with questions about computing the compensation of self-employed individuals. The calculation of earned income can have a profound effect on pension contributions, and frequently involves interrelated computations.

Derrin Watson "wrote the book" on this topic, and in this popular Web seminar, he shares his knowledge with you, along with detailed examples.

Topics include:

  • Self-employed Individuals
  • Role of earned income
  • What is earned income
  • Earned income adjustments
  • Earned income and compensation definitions
  • Applying the 401(a)(17) limit
  • Computing nondiscriminatory compensation
  • Interrelated computations
  • Earned income and 401(k)
  • Multiple businesses
  • S Corporation dividends
  • Effect of losses on earned income
  • Sample spreadsheet

There are no prerequisites and no advance preparation required for this program. However, an attendee should have an understanding of the fundamental rules and concepts of 401(k) administration and testing, and have one year of experience.

Level: Intermediate

Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: S. Derrin Watson, J.D.
Recipient of ASPPA's 2006 Educator of the Year Award

Objectives: At the conclusion of these programs, a participant should be able to:

  • Determine if someone is a self-employed individual
  • Compute an individual’s net earnings from self-employment
  • Compute an individual’s earned income
  • Compute the plan compensation of self-employed individuals
  • List typical businesses which do not generate earned income
  • Use simple spreadsheets to work with earned income calculations

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