Client is a single member LLC with a S Corp election. No problem there.
They opened a Roth 401K in 2019 and contributed $1,000 in the last quarter. At the moment, they have charged the $1,000 to distributions. There is no mention of it on the W2, and boxes 1,3,& 5 are equal.
I have inquired as to whether the contribution is an employer or employee contribution. While I wait for that answer, it occurs to me that a quick check of how these are treated would be good.
If I understand correctly: Employer contribution would be not be reported on the W2, not affect FICA, is deductible to the employer, and is considered a pretax contribution as far as the employee is concerned.
If its an employee contribution, I will need to prepare a W2C to increase boxes 1, 3,& 5 by the amount of the contribution and show it in box 12. I will also need to prepare a 941X to show the additional FICA taxable income and pay the additional tax due. The contribution will then be post tax from the employee perspective.
Have I got this correct?