How to plan for 1099 income

[jfoxcpacfp]

imgdoc wrote:

Another related question: I have been using my SS number for my 1099 work W-9 and billing invoices I send out. Now with setting up my SOLO 401k I also have an EIN. Should I use the EIN for my 1099 work? Does it matter?

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It really won't matter as long as you use the same number for all payments. Since you have begun with the SSN, keep it that way or you'll receive payments under 2 different ID numbers and the IRS will be expecting 2 different returns (schedule C's). Can be handled by assignment of income from one form to the other (we commonly have to do this for doctors) but it's kind of clunky.

[imgdoc]

Another related question: I have been using my SS number for my 1099 work W-9 and billing invoices I send out. Now with setting up my SOLO 401k I also have an EIN. Should I use the EIN for my 1099 work? Does it matter?

[jfoxcpacfp]

A home office set up according to IRS guidelines, i.e. a separate space, exclusive use, necessary for the operation of the business (such as storing your records and/or handling your administrative tasks). A storage space, such as a closet, does not have to be exclusive use.

[doconc]

jfoxcpacfp wrote:

You may be able to deduct a prorated amount of your rent expense if you need/use a qualified home office. Recommend you discuss with your CPA/EA.

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What is a qualified home office?

[jfoxcpacfp]

You may be able to deduct a prorated amount of your rent expense if you need/use a qualified home office. Recommend you discuss with your CPA/EA.

[doconc]

jfoxcpacfp wrote:

doconc wrote:

I am currently a fellow, and I am moonlighting this year. I too get 1099, (flat hourly rate at moon lighting place). Can I claim any prtion of rental income.?

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I’m not sure what you are asking. Is there a relationship between your rental income and your moonlighting income?

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Aplologies?

I meant rent. not rental income

[jfoxcpacfp]

doconc wrote:

I am currently a fellow, and I am moonlighting this year. I too get 1099, (flat hourly rate at moon lighting place). Can I claim any prtion of rental income.?

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I'm not sure what you are asking. Is there a relationship between your rental income and your moonlighting income?

[doconc]

I am currently a fellow, and I am moonlighting this year. I too get 1099, (flat hourly rate at moon lighting place). Can I claim any portion my rent?

[jfoxcpacfp]

imgdoc wrote:

So if I had $10,000 in 1099 income, the max I can divert to my solo 401K, is it 10K total or 10K employee + 20% of net earnings employer contributions ( 10K plus +/- 1.8K = +/- 11.8K total) ? Provided that I will have, let say 15K  remaining employee contributions from my 403b.

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consultpsych is correct. Note that the max contribution amount will be reduced by any deductions you take on your schedule C (home office, tax prep, etc.)

[consultpsych]

imgdoc: 10k total. You can't put more into the solo 401K then you make with your solo business.

[imgdoc]

So if I had $10,000 in 1099 income, the max I can divert to my solo 401K, is it 10K total or 10K employee + 20% of net earnings employer contributions ( 10K plus +/- 1.8K = +/- 11.8K total) ? Provided that I will have, let say 15K  remaining employee contributions from my 403b.

[consultpsych]

 

[imgdoc]

That sounds like a good plan. I may use some of these steps. I also want to get the 403b match but that will be way bellow the limit. And since I am not sure if I will have enough of 1099 income to fill up the gap, I may want to contribute more to the 403b.

[jfoxcpacfp]

imgdoc wrote:

Thank you, Joanna. I had this wrong. Since I won’t know how much 1099 I will get until the end of the year, what is the best approach to maximize employee contributions for both solo K and 403b? I want to put as much as I can in my Solo k and remaining in my 403b. I guess, i can wait for after end of the year to send check for the solo k, however 403b are salary deductions.

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You're going to have to estimate as you go along during the year. That may mean you overcontribute but as long as you take it out by 4/15, you'll be fine.

[jfoxcpacfp]

imgdoc wrote:

Thank you, Joanna. I had this wrong. Since I won’t know how much 1099 I will get until the end of the year, what is the best approach to maximize employee contributions for both solo K and 403b? I want to put as much as I can in my Solo k and remaining in my 403b. I guess, i can wait for after end of the year to send check for the solo k, however 403b are salary deductions.

Click to expand...

You're going to have to estimate as you go along during the year. That may mean you overcontribute but as long as you take it out by 4/15, you'll be fine.