Integrated PS Allocation for Self-Employed Individuals - Excel

Long story short ...

We have run across a complex situation where the valuation software is unable to calculate the integrated PS allocation for self-employed individuals and we have to figure this out on a spreadsheet.  Can anyone provide insight on the formula to use for splitting income between compensation and integrated allocation where some partners plan compensation will be over the TWB and others below.  This is probably a long shot but thought I would give this a shot.  Thanks for any help!

Here is an online application that works for corporate plan sponsors, which calculates the best integration level (sometimes it's less than the taxable wage base), from the perspective of the one or more employee-participants who are shareholders. It's useful when designing a plan (e.g., specifying the integration level in the adoption agreement of a new profit sharing plan).

https://benefitslink.com/m/integ.cgi

It allows the user to specify which of the participants are "favored" (i.e., the partners, in your situation), even though one or more of them doesn't have compensation that exceeds the integration level.

I'm not sure I understand your question, but maybe the online app will be helpful in some respect.

Are you looking for a two tier integrated spreadsheet for calculating profit sharing?

14 minutes ago, Mr Bagwell said:

Are you looking for a two tier integrated spreadsheet for calculating profit sharing?

Yes, correct, that is exactly what I am looking for.

1 hour ago, Dave Baker said:

I'm not sure I understand your question, but maybe the online app will be helpful in some respect.

The online app is not the solution to my dilemma.  I am not trying to determine integration levels, rather calculating partner income based on set integration levels.

Thanks!

Ok.  See if you like.... Risk is all yours.  

Sometimes you have to chase the PS amount to get exactly where you want to be.  Example:  the partner wants to be maxed vs. a set amount of PS dollars.

2 -TIER Integrated.xlsx

3 hours ago, PensionPro said:

Long story short ...

We have run across a complex situation where the valuation software is unable to calculate the integrated PS allocation for self-employed individuals and we have to figure this out on a spreadsheet.  Can anyone provide insight on the formula to use for splitting income between compensation and integrated allocation where some partners plan compensation will be over the TWB and others below.  This is probably a long shot but thought I would give this a shot.  Thanks for any help!

Ummm..... what software are you using?  Maybe it's just that you need some help on setting the appropriate settings.  As far as I know, all the majors now work just fine.  Why not ask for the help you seem to need: "How do I make X software do the split when this is the situation (explain why it isn't working)".  For example we can make Relius do the calc in all situations.

1 minute ago, Larry Starr said:

Ummm..... what software are you using?  Maybe it's just that you need some help on setting the appropriate settings.  As far as I know, all the majors now work just fine.  Why not ask for the help you seem to need: "How do I make X software do the split when this is the situation (explain why it isn't working)".  For example we can make Relius do the calc in all situations.

We use ASC  and we spoke to ASC support and there is no easy way to run the calcs on ASC.  Short story long ... plan is co-sponsored by a corporation and a partnership, partners (about 6 of them) get W-2 from corp and K-1 from partnership.  The partnership will deduct contribution made to employees of the partnership not the corporation.  To make matters more interesting, they also have a safe harbor matching contribution, and they have forfeitures they want to use to reduce contribution.  While we will adjust our client invoice to reflect the additional work, it is not something ASC can handle easily.  I figured it would be easier to run it on Excel if I can work out the formula first.

I know the formula for a percentage of comp contribution.  Contribution percent / 1 + contribution percent.  Trying to figure similar formula for integrated allocation so I can lessen the time spent on trial and error.

38 minutes ago, Mr Bagwell said:

Ok.  See if you like.... Risk is all yours.  

Sometimes you have to chase the PS amount to get exactly where you want to be.  Example:  the partner wants to be maxed vs. a set amount of PS dollars.

2 -TIER Integrated.xlsx

Thanks Mr. Bagwell, appreciate your help.  We are actually looking for the 2-tier allocation but a spreadsheet that takes into account partnership compensation - the circular calculation so split income between contribution and compensation.