Question on Solo 401k.

[Eddie Ibrahim]

Hi,

I understand that the Employer (Single member Sub-S) contribution is tax deductible for the Company, however the Company pays both side of the ss/medicare (15.30%) tax. 

The question is, what is the cost of say a $100K bonus to max the annual total contribution (25% of wages)?  Yes, the flow through is reduced by $100k but it will be reflected in the employee's W2.

Therefore, the W2 wages is included in the employees wages, hence paying income taxes and the Company paying the 15.3% payroll taxes. The other option is to distribute the $100k (I know there are limits) not pay the payroll taxes nor most of the income taxes.   

What am I missing? Thanks