I am making some changes this year and I appreciate some feedback on the transition. I am going from an academic W2 position to a private practice position with a K-1 payment structure. I am setting up an LLC with S Corp tax treatment. My wife and I will be the 2 members. My wife works for another company and is a W2 employee at the moment with her own retirement plans (401a, 403b, 457b). In the future she is thinking of starting her own gig and that income would be funneled through this LLC as well.
We will have 2 employees, my parents in their late 60s, who will help us with administrative duties and such. We will probably pay them about $1,000 each a month. Main reason that we will be hiring my parents, in addition to us needing some help of course, is that they are older immigrants and need a few more years of FICA contributions to qualify for Medicare. So far we have been paying them for babysitting our children, but the CPA suggested having them help out with the LLC as well so that we can pay them through the LLC from now on. This way they can also start paying us for rent since we take care of of their housing.
1. Will the fact that we have employees (my parents, who are not really interested in contributing to retirement) affect my plans to have a solo 401k? I am staying away from SEP IRA in order to keep doing Backdoor Roths plus SEP IRA contribution limits are too low
2. I expect to gross about $600,000/year through the LLC. This is way above the average for my specialty but I moonlight a lot and have extra duties at work. My CPA, who takes care of many physicians in the area, recommended I take a salary of about $10,000/month and pay myself the rest as a distribution. I guess that I will need to pay myself a bigger salary if I want to max out solo 401k contributions, correct? Is there a calculator online where I can plug the numbers in so I can plan exactly how much salary to pay myself in order to max out this contribution?
3. Before leaving my job in April I will have contributed for 2018 about $30,000 in a 401a, $18,000 in a 403b and $18,000 in a governmental Roth 457b. Can I contribute more to the solo 401k for 2018? Do I need to deduct my 2018 contribution to the 403b from the maximum I can put into the solo 401k?
4. My current employment-related retirement stuff is with TIAA and consists of a mix of tax-deferred and Roth split among 401a, 403b, and governmental 457b. I also have a Vanguard account for my Roth IRA and taxable accounts. As I leave my current job I’d like to rollover the TIAA accounts into a 401k with Vanguard to keep it all together but I understand Vanguard does not accept rollovers into a 401k and, again, I do not want to roll it into a tIRA. Any way around it or just go with another company? I am thinking E-trade based on what I have read.
I am happy to hear your thoughts inside and outside the box.
We will have 2 employees, my parents in their late 60s, who will help us with administrative duties and such. We will probably pay them about $1,000 each a month. Main reason that we will be hiring my parents, in addition to us needing some help of course, is that they are older immigrants and need a few more years of FICA contributions to qualify for Medicare. So far we have been paying them for babysitting our children, but the CPA suggested having them help out with the LLC as well so that we can pay them through the LLC from now on. This way they can also start paying us for rent since we take care of of their housing.
1. Will the fact that we have employees (my parents, who are not really interested in contributing to retirement) affect my plans to have a solo 401k? I am staying away from SEP IRA in order to keep doing Backdoor Roths plus SEP IRA contribution limits are too low
2. I expect to gross about $600,000/year through the LLC. This is way above the average for my specialty but I moonlight a lot and have extra duties at work. My CPA, who takes care of many physicians in the area, recommended I take a salary of about $10,000/month and pay myself the rest as a distribution. I guess that I will need to pay myself a bigger salary if I want to max out solo 401k contributions, correct? Is there a calculator online where I can plug the numbers in so I can plan exactly how much salary to pay myself in order to max out this contribution?
3. Before leaving my job in April I will have contributed for 2018 about $30,000 in a 401a, $18,000 in a 403b and $18,000 in a governmental Roth 457b. Can I contribute more to the solo 401k for 2018? Do I need to deduct my 2018 contribution to the 403b from the maximum I can put into the solo 401k?
4. My current employment-related retirement stuff is with TIAA and consists of a mix of tax-deferred and Roth split among 401a, 403b, and governmental 457b. I also have a Vanguard account for my Roth IRA and taxable accounts. As I leave my current job I’d like to rollover the TIAA accounts into a 401k with Vanguard to keep it all together but I understand Vanguard does not accept rollovers into a 401k and, again, I do not want to roll it into a tIRA. Any way around it or just go with another company? I am thinking E-trade based on what I have read.
I am happy to hear your thoughts inside and outside the box.
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