Are the 25% profit contributions also a deduction against income? Assume the income source is a pass-through entity such as a single member LLC, so all income comes straight to the individual's taxes. Where is that accounted for in the tax forms?


Yes, they are deductible. The treatment is a little weird because of the self-employed nature.

Profit Sharing contributions made to employees are deductible at the Employer level and are reported on line 19 of the Schedule C.

However, contributions made by the employer on behalf of the self-employed individual are reported on the individual's 1040 (line 28), which reduces the individual's adjusted gross income.

Disclosure: I am not a CPA. Consult your CPA or Tax Attorney.

Sources: IRS Schedule C Instructions - Page 8

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