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strictly 1099 have my own LLC need to set up solo K and reduce taxes

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  • strictly 1099 have my own LLC need to set up solo K and reduce taxes

    I'm an independent ED contractor.  I pay 40% taxes. I have my own LLC I set up last April. I get no benefits or retirement or health insurance I have to get it on my own. I'm looking for any suggestions to help. Im new to the game second yr working as a 1099 employee I'm totally lost don't know where to start. I don't have a retirement plan need to set up a soloK which is the best company? I did see the comparison that was on the website was thinking of going with  Vanguard.

  • #2
    If you do not have a CPA and do not have a fee-only CFP, either of which would be able to give you specific advice:

    1. Set up an HSA

    2. Set up a SOLO-401k wherever you are most comfortable with the services. (Contrary to conventional wisdom, I am not a Vanguard fanatic.)

    3. Optional: set up a combo plan, depending upon your income, resources, and financial goals.

    4. Contribute to a backdoor Roth IRA

    5. Set up a taxable account for any other savings.


    Of course, all of this assumes you have appropriate life, disability, and umbrella insurance, no or low student loan debt, you're not paying PMI on a mortgage, etc. Basically, that you have some kind of financial plan in place. My financial guides for doctors might be helpful.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Setting up a solo 401k is very easy.  We did with fidelity so you can roll any other accounts in if needed.  Vanguard doesn't allow that I believe.

      https://www.fidelity.com/retirement-ira/small-business/self-employed-401k/overview

       

      Agree tho an HSA may be useful as well.  Not sure how hard those are to set up.

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      • #4
        do you mean Combo plan for 401K?  I have been getting IRA of $5000 for the past 3 yrs.  I am buy a small condo but its only 70g so my PMI is not much. I do have a CPA but not very helpful w financial planning. I paid 250K in takes last year I don't want to do that again. so any suggestions are welcome.

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        • #5
          Do I need to open HSA a small business or for individual account?

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          • #6




            Do I need to open HSA a small business or for individual account?
            Click to expand...


            The first step is to have a HDHP (High Deductible Health Plan). That is the only insurance plan that qualifies for an HSA. You can open a personal HSA and contribute the same amount for yourself as a business HSA.
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7




              do you mean Combo plan for 401K?  I have been getting IRA of $5000 for the past 3 yrs.  I am buy a small condo but its only 70g so my PMI is not much. I do have a CPA but not very helpful w financial planning. I paid 250K in takes last year I don’t want to do that again. so any suggestions are welcome.
              Click to expand...


              Basically a 401k with a DB plan.  This can work better for someone who has a stead 1099 income.  I typically recommend that you should be at least 35 when setting up paired 401k plus DB plan.  A spouse can be added to the payroll (with a written job description) to increase your contribution into both plans. Here's some more information on the types of retirement plans you can set up for yourself:

              http://quantiamd.com/player/ygvmhdmbm?cid=1467

              Ideally you'll need to pay yourself a W2 to take advantage of the maximum allowed contribution.
              Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

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