$5k. the lesser of $55k or 25% of compensation.
What kind of business are you in that "reasonable wages" as commensurate with industry and job description only pays you $10/hour based on 40 hours x 52 weeks and distribution of 3x that? Only the irs is the final authority but to me sounds as if you should flip-flop the two. With $60k of W2 you could triple the SEP, which also would reduce net passthrough profit by $10k, which at a 20% marginal tax rate is worth an additional $2k in your pocket
