Hi guys, long time lurker, first time poster.
I'm about 6 years out of Ortho fellowship. I went to work for a Hospital in the Midwest right after fellowship and was a W2 employee. Didn't have much options and was not allowed to moonlight or do any independent contractor work. So basically just put the standard 18K into the company 401k and the rest into real estate and taxable accounts. (I didn't realize they were a non profit and I could have done some loan forgiveness but unfortunately that boat has since sailed)
Now I moved into a multi specialty group but am still an employee. Same plain Jane W2 with only 18K 401k option (small company so they have no match), however, I specifically negotiated with my new job that they will allow me to do locums work as long as I use my vacation time. I probably will only end up making about 10-15K per year this way (I want to have at least some vacation time for vacation!)
So now, do I form a LLC, get EIN and have the locums company pay my entity via 1099? My CPA was thinking instead to form a S corp, but after some reading on this site it doesn't seem to make sense with all the accounting and record keeping hassle.
Do I even need a LLC at all, or can I just do sole proprietor? What are the advantages, disadvantages of this?
After I decide which entity to form, how do I maximize my tax sheltering? I really don't need the extra income and paying 39.6% + state tax on it wouldn't really make the extra work and time away from family worth it.
I am under the impression that my new LLC I use for locums can open up its own 401k? Is this correct? Is this even worth it if I'm only projecting to make 10-15k at the most. One benefit of getting paid via 1099 to this new entity is I can now deduct all my CME, travel, phone, internet, license and professional membership fees "above the line" and I won't be subject to the 2% floor if it was W2 income? Is this the best reason to get paid via 1099? These expenses may even completely negate any income.
To make matters even more complicated my old employer wants me to come there a few days every other month and do some trauma call but they said they can only pay me W2 income. That would basically be taxed at 39.6% + state tax. Hardly worth the extra travel and trouble. Is there any way I can just put that entire earnings into another retirement account since it is considered a "unrelated employer" to the others?
I'm sorry for the long winded questions. I would appreciate any help!
I'm about 6 years out of Ortho fellowship. I went to work for a Hospital in the Midwest right after fellowship and was a W2 employee. Didn't have much options and was not allowed to moonlight or do any independent contractor work. So basically just put the standard 18K into the company 401k and the rest into real estate and taxable accounts. (I didn't realize they were a non profit and I could have done some loan forgiveness but unfortunately that boat has since sailed)
Now I moved into a multi specialty group but am still an employee. Same plain Jane W2 with only 18K 401k option (small company so they have no match), however, I specifically negotiated with my new job that they will allow me to do locums work as long as I use my vacation time. I probably will only end up making about 10-15K per year this way (I want to have at least some vacation time for vacation!)
So now, do I form a LLC, get EIN and have the locums company pay my entity via 1099? My CPA was thinking instead to form a S corp, but after some reading on this site it doesn't seem to make sense with all the accounting and record keeping hassle.
Do I even need a LLC at all, or can I just do sole proprietor? What are the advantages, disadvantages of this?
After I decide which entity to form, how do I maximize my tax sheltering? I really don't need the extra income and paying 39.6% + state tax on it wouldn't really make the extra work and time away from family worth it.
I am under the impression that my new LLC I use for locums can open up its own 401k? Is this correct? Is this even worth it if I'm only projecting to make 10-15k at the most. One benefit of getting paid via 1099 to this new entity is I can now deduct all my CME, travel, phone, internet, license and professional membership fees "above the line" and I won't be subject to the 2% floor if it was W2 income? Is this the best reason to get paid via 1099? These expenses may even completely negate any income.
To make matters even more complicated my old employer wants me to come there a few days every other month and do some trauma call but they said they can only pay me W2 income. That would basically be taxed at 39.6% + state tax. Hardly worth the extra travel and trouble. Is there any way I can just put that entire earnings into another retirement account since it is considered a "unrelated employer" to the others?
I'm sorry for the long winded questions. I would appreciate any help!
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