ABC Company

ABC Company, an S corporation, maintains a profit-sharing plan. The employer year and the plan year are December 31. Here is the compensation earned by ABC Company employees to be used for qualified plan purposes in calendar years 2017 and 2018:

Employee 2017 2018

Cindy $270,000 $290,000

Ward $200,000 $210,000

Kathy $100,000 $105,000

Susan $90,000 $95,000

Sally $40,000 $60,000

Total Compensation Paid $700,000 $760,000

1. What is the maximum contribution that could be deducted in 2017 and 2018?
2. How late could the contribution be made for each year and still be deductible?
3. If ABC adopts a 401(k) plan in 2018 and employees make elective deferrals of $45,000, how much of a deductible profit-sharing contribution could ABC make?
4. What if ABC contributes $200,000 for 2017? How much should it contribute for 2018 if it wants to make the largest possible deductible contribution for 2018?
5. How much could ABC deduct in 2018 if the plan year was June 30?