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solo 401k side S corp, + max 401k W2

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  • #16

    Concur with @dmfa. The calculations are all wrong. If the CPA gave you this info, s/he d/n understand some of the basics. And, unless you fail to set up the corp by 12/31, there is no reason I can think of that you would want to have a SEP instead of a solo-k.

    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #17




      Concur with @dmfa. The calculations are all wrong. If the CPA gave you this info, s/he d/n understand some of the basics. And, unless you fail to set up the corp by 12/31, there is no reason I can think of that you would want to have a SEP instead of a solo-k.
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      I did the math wrong.  DMFA is correct about the numbers and matches my note I wrote down.

       

      In regards to sep vs solo-k, I think he does not want me to generate a W-2.  Doing so would require me to hire a payroll company.  Thus, he would run the income from my S-corp on to my personal 1040 as a sole proprietor.  Thus, he said SEP is the way to go.

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      • #18
        Your CPA really needs to take some continuing education on small business tax structures and their retirement plans.

        An S-Corp pays its shareholder-employee as a W-2 employee. A sole proprietor is a totally different tax structure, using Form 1040 Schedules C and SE. An S-Corp does not run its income thru a sole proprietor.

        A sole proprietor can easily have a Solo 401k or a SEP IRA, just like an S-Corp.

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