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  • i401K from multiple 1099's

    I receive several 1099's, mostly from surveys, but I am going to be starting a moonlighting position this fall where I will be receiving another 1099. I was thinking about starting a i401K to decrease my taxable income (already am maxing my 403b at my W2 job). You might have to speak to me like I'm 5, but is it possible to have just one i401K (probably at Vanguard), with employer contributions from several different 1099's?  My understanding is that the 1099's from surveys could likely be considered "one business", but this probably changes with the moonlighting position.  Thanks in advance for any help you can offer!

  • #2
    Yes, you can certainly do that. Ideally you might want to establish an entity (LLC possibly taxed as S corp), and have all of your 1099s go to that entity.  The entity can then adopt a retirement plan (such as solo 401k).  You can also do this as a solo proprietor, but at some point you might want to do tax planning to minimize your payroll taxes as well as to make everything neater by forming an entity.  Some doctors also end up making significant amount of money as 1099 contractors, so they end up setting up combo plans (401k + DB).  In that case, having an entity is the most efficient way to implement this type of plan.
    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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    • #3

      roy3333 wrote:I receive several 1099’s, mostly from surveys, but I am going to be starting a moonlighting position this fall where I will be receiving another 1099. I was thinking about starting a i401K to decrease my taxable income (already am maxing my 403b at my W2 job). You might have to speak to me like I’m 5, but is it possible to have just one i401K (probably at Vanguard), with employer contributions from several different 1099’s?  My understanding is that the 1099’s from surveys could likely be considered “one business”, but this probably changes with the moonlighting position.  Thanks in advance for any help you can offer!

      Yes,. you will have a single SOLO-k. The different sources of income are not directly linked to the SOLO-k. The link between the income and the SOLO-k is your self-employment "business". You can report the surveys together with your new 1099 income all on the same schedule C. You may elect not to set up an LLC if you are not concerned about liability from the 1099 income and/or if you are already covered through your current malpractice coverage - many doctors bypass this step. Just be sure you have appropriate homeowner's (if you have a home office) and umbrella insurance .

      Depending upon where you live, it may cost you hundreds of dollars annually to have your own LLC. Definitely no need to set up an S-corp as you would have to set up payroll reporting for yourself and file a separate income tax return, which would cost even more.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        Thank you very much for the reply.  I've considered doing the LLC at some point in the future, but I think I might hold off for now to see how well I'm going to enjoy doing this contract work on the side.  Another question I guess, how does it work doing employer contributions from different sources? Can I just take the sum total of all my 1099's, subtract payroll tax, and then do a lump some of 20% of that amount to get the amount I can put in as an employer?

        For example:

        If my 1099's are for $1000, $2000, and $7000, can I just do a one lump sum employer contribution of 20% of $10000 minus payroll taxes? Or do I need to do 3 individual transactions?  Thanks again for your help!

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        • #5




          Thank you very much for the reply.  I’ve considered doing the LLC at some point in the future, but I think I might hold off for now to see how well I’m going to enjoy doing this contract work on the side.  Another question I guess, how does it work doing employer contributions from different sources? Can I just take the sum total of all my 1099’s, subtract payroll tax, and then do a lump some of 20% of that amount to get the amount I can put in as an employer?

          For example:

          If my 1099’s are for $1000, $2000, and $7000, can I just do a one lump sum employer contribution of 20% of $10000 minus payroll taxes? Or do I need to do 3 individual transactions?  Thanks again for your help!
          Click to expand...


          You do not need to do 3 individual transactions. You will base your contribution on the net profits of your business, not check by check. The net profits of your business may be reduced by other expenses, such as the aforementioned home office, mileage, professional fees, supplies, etc. So - the starting point for your calculation is the bottom line on your schedule C, combining all income and subtracting business expenses.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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