It's hard being a new attending..

[Gavanshir]

Hi folks,

I feeling a bit overwhelmed in my current finances and jobs so I wanted to seek some direction here. I actually saw a CPA a couple of months ago and he didn't seem too helpful, just did some numbers in his head and said I should pay him $1200 to do a S-corp for me but I was not convinced. Here is my situation:

I have 4 (soon to be 5) part-time W2 jobs and all are remote work from home:

Job 1: $2000/week
Job 2: $1700/week
Job 3: $1300/week (only since July)
Job 4: $1000/week (only since July)
Job 5: Started new job this week, not paid yet. Will likely be $500-$1000/week

3 out of the 4 of the above jobs offered me to start as 1099 but I convinced them to give me W2 because it seemed simpler, they would pay my taxes and liability insurance. I'm not sure if that was a good decision or if I am better of asking them all to make me 1099 and doing my own taxes as a LLC/S-corp.

I also have a small private practice as a sole proprietor with weekly income of $0-600/week.

Vanguard accounts:
Roth IRA: $35,000, started doing backdoor since last year
Brokerage: $38,000
Robinhood: $153,000 (my holdings are down $18K this year but I have not sold)

Mortgage:
$1800/month in a great low cost of living city

Cars:
Family SUV - paid off
Sports car - paid off
Wife's car - paid off
I did gift a $21K car to my father in law this year which seemed impulsive but made him very happy.

We both each have around $500K in medical school debt and are going for PSLF.

I'll be filing taxes as married for the first time this year, my wife is in fellowship with an income of around $70K/year. We have 3 young kids, I believe my wife had been claiming them previously but I don't think it matters anymore as I believe any child tax credit phases out at our income. 2 go to a school and we have a full-time nanny for the little one.



The only things I'm thinking of doing are possibly putting away some money in a solo 401K before the end of the year. Likewise I believe my wife can put away some money too to lower our combined AGI. Any other advice would be greatly appreciated.

[Craigslist]

500k each in medical school debt or together? Also, someone correct me if im wrong, but in your situation 1099 would have been better than w-2.

[Gavanshir]

It is 500k EACH. Can you please elaborate as to why you believe 1099 would have been advantageous?

[childay]

1. Not sure what kind of new doc specialty gets 5 part-time gigs?
2. Shouldn't be able to negotiate W2 vs 1099 generally..
3. Are you getting benefits at any of these W2 jobs? Retirement plans?
4. 1M in med school debt?!
5. Which of these part time jobs is going to qualify you for PSLF?!
6. At 300K something + $70k income s-corp probably not a good plan but need to run numbers
edit: you're broke AF don't give away cars

[CordMcNally]

The guy you gave your car to has more money than you.

It has been a difficult task to lose money in the market this year so that’s a fairly impressive feat. Hopefully you’ve learned a valuable lesson.

I’m not sure how efficient 5 part time jobs can be for a physician.

Take a deep breath and start learning personal finance/investing small piece by small piece. You’ll be glad you did in a year.

[Gavanshir]

1. Not sure what kind of new doc specialty gets 5 part-time gigs?

Psychiatry. It has been great, I'm not maximizing my income but it has allowed me to have extremely flexible hours and remain involved in my kids lives, amongst other things.
2. Shouldn't be able to negotiate W2 vs 1099 generally..
I was able to every time.
3. Are you getting benefits at any of these W2 jobs? Retirement plans? No. Except for profit sharing interest at one and little fees like licensure and CME fees covered here and there.
4. 1M in med school debt?! Initially around 400k, it is now at 500 with accrued interest.
5. Which of these part time jobs is going to qualify you for PSLF?! 2 of them do.
6. At 300K something + $70k income s-corp probably not a good plan but need to run numbers
edit: you're broke AF don't give away cars;

It doesnt feel like it..? I'm not sure why we are not under more financial stress. Perhaps it's the low housing costs.

[Brains428]

Maybe its the psychiatrist in you that finds the calm in $1MM of debt? It does seem like the path to PSLF has been made less complicated.

Standard stuff- make sure you have appropriate insurance set up, have a PSLF side fund, and don't really live like an attending until that hurdle is cleared.

It takes some time to get a solo401k set up. Given that you have multiple side gigs, you may want to see if you can get one that gives you an opportunity to do the mega backdoor Roth (unless they phase it out-- but that's pending). Because of the timing issue, you could potentially open a SEP IRA in Jan 2022 for a 2021 tax year contribution and then roll it over to the solo 401k once it's set up. You don't want to set up and fund the SEP until 2022 because of pro rata rules for the regular backdoor IRA.

Probably shouldn't buy any more cars for the in-laws. If they complain, show them your student loan balance.

[Craigslist]

Maybe its the psychiatrist in you that finds the calm in $1MM of debt? It does seem like the path to PSLF has been made less complicated.

Standard stuff- make sure you have appropriate insurance set up, have a PSLF side fund, and don't really live like an attending until that hurdle is cleared.

It takes some time to get a solo401k set up. Given that you have multiple side gigs, you may want to see if you can get one that gives you an opportunity to do the mega backdoor Roth (unless they phase it out-- but that's pending). Because of the timing issue, you could potentially open a SEP IRA in Jan 2022 for a 2021 tax year contribution and then roll it over to the solo 401k once it's set up. You don't want to set up and fund the SEP until 2022 because of pro rata rules for the regular backdoor IRA.

Probably shouldn't buy any more cars for the in-laws. If they complain, show them your student loan balance.

His 1099 job only pays 0-600 a month, this guy cant max out a solo 401k. Everything else is w-2

Edit he can't max out the employer side.

OP, you are missing a lot of deductions you can take as a 1099 that you can't take as w-2, and it pales in comparison to the pittance of CME you are getting.

[jacoavlu]

as long as you can get someone to pay you W2 wages of $147k in 2022 then your SS tax will be covered.

if there are legit expenses that you’re not able to deduct bc of your W2 status then having remainder income above that level paid 1099 may save you some taxes. better yet if you could negotiate to get more as 1099 than W2 - a typical premium is at least 30%.

you would pay a bit more medicare tax out of your pocket. and you’d be missing out on those employers profit sharing. just have to run the numbers both ways.

obv if you’re going for PSLF then you gotta keep at least one employed gig that qualifies.

[Otolith]

The 2 jobs that are non profit and PSLF eligible do you put in 30hrs/week that can be verified? Have you sent in an employment certification form and received any credit for your payments? Not saying its not possible but looks like a PSLf headache...

As for your financial outlook, this sites theme is simplicity and "safe" index investing while maximizing tax protected space. Only you can decide whether you want to simplify or not...

While I enjoying doing everything myself IF I were in your situation I would employ help with a better specialized CPA/fee for service FA. As doing this would simplify things.

[TXDoc21]

What is the difference between brokerage and Robinhood? Is this two brokerage accounts with different investing strategies? Is one your Efund? In the robinhood account you lost money this year. What is it invested in?

[abds]

Psychiatry. It has been great, I'm not maximizing my income...

You have a million dollars in debt and you're making stupid decisions like giving away cars and somehow losing 10% in your Robinhood in this year's amazing market. You should focus on maximizing your income.

[F0017S0]

Sounds like you have a critical financial emergency, Gavanshir. You and your wife owe $1m plus your mortgage and you are pulling in what sounds like around $470k (sum of your weekly pay times fifty-two weeks plus your wife's income). I didn't see the balance of your mortgage, but it sounds like you are are x2-3 debt-to-income. My calculation excludes tax withholding, so I expect that the debt-to-income is on the higher end of that range, if not over. The point being I'm not sure that focusing on some ticky-tack tax minimizing strategy is your best first move. Tax avoidance has a place in a well-thought plan, but that alone will not generate the funds you require to start digging yourself out of this hole. Edit: Tax minimizing strategies are for those people with money who want to limit the government's take, not for people looking to get out of debt. I realize that you are banking on PSLF, but depending on the number of qualifying payments (i.e. time) you have left to make, it doesn't sound like a decent plan.

How much more fellowship time does your wife have to complete? And what is her expected salary for your area as an attending? With a low COL area, you might consider living on one attending salary, throwing as much money as you can from the other salary towards your loans to avoid them growing too much in the event that Congress decides in the future that PSLF is a little too rich of a give away. And as childay said, stop buying other people stuff. Time to focus on you.

[Tim]

https://forum.whitecoatinvestor.com/general-investing/7183-tesla-the-investment?p=226084#post226084

Over a year ago, there was a posting about "Eeek lesson learned, I went from being up 12K since March to being down 20K in 3 day. s."
Nothing personal, but poor financial decisions for over a year do not seem to be getting any better. You may be a fantastic shrink and father, but poor decisions will lead to poor results. You can't out earn poor financial decisions. It's just math, not intended as an insult. Over a year ago and nothing has changed.

[Tangler]

Not trying to pile on, but concerned you are in a mess.

one suggestion:

1. student loans: pay a wci recommended student loan advisor to ensure you are perfectly set for PSLF.

https://studentloanadvice.com