W-2 plus 1099

[triggermaster]

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How much 1099 income do you need to make for it to be worthwhile to set up a corporation, solo 401k, pay employment taxes, and do 1099 work vs doing internal w-2 overtime work at your primary job if the hourly pay is the same?

 

[aneftp]

How much 1099 income do you need to make for it to be worthwhile to set up a corporation, solo 401k, pay employment taxes, and do 1099 work vs doing internal w-2 overtime work at your primary job if the hourly pay is the same?

150-200k NET 1099 after expenses is my cut off if u have a hybrid w2 job recommendation

UNLESS you have a non working spouse or college age kid u can put on my s corp payroll. Than being an s corp is still beneficial if u can employer non working spouse or kid.

Your main savings from s corp is Medicare tax savings.

Since you already max out on payroll taxes (15.6%) at around 170k as W2. You won’t get much of tax savings with s corp making less than 200k.
Factor in accounting fees ($3000-5000) paying difference state s corp filing taxes (California s corp is pretty high I think) unemployment taxes being s corp

So there are fees that can off set any advantage u get as s corp.

So how much are u planing to make as 1099 side gig locums?

 

[Shimmy8]

So I’m gonna be at 150k net 1099 with 500k W2 this year. I did not set up anything other than an LLC for my 1099 work.

My W2 job maxes out to the IRS max of 64k or whatever for the 401k, and I don’t care to do a CBP or anything.

 

[aneftp]

So I’m gonna be at 150k net 1099 with 500k W2 this year. I did not set up anything other than an LLC for my 1099 work.

My W2 job maxes out to the IRS max of 64k or whatever for the 401k, and I don’t care to do a CBP or anything.

If u are married and have non working spouse. U would benefit putting them on payroll

But if u are single. U won’t benefit much from s corp at 150k 1099 with full 500k w2 income.

 

[finalpsychyear]

If u are married and have non working spouse. U would benefit putting them on payroll

But if u are single. U won’t benefit much from s corp at 150k 1099 with full 500k w2 income.

Ive only ever been 1099 and with trump back maybe you can get the SUV deduction again with 100% bonus deprec included if he retros the 100% back.. Some places they cant control their 401k investments or are limited so they do some through their side gig and have access to everything. Aside from health insurance write offs, business trips, office furniture/equipment, employing kids/spouse to get some 401k deductions, the CBP is the biggest write off if esp if your in the last several years of work.

 

[maxxor]

So I’m gonna be at 150k net 1099 with 500k W2 this year. I did not set up anything other than an LLC for my 1099 work.

My W2 job maxes out to the IRS max of 64k or whatever for the 401k, and I don’t care to do a CBP or anything.

if you have a 401k and not a 403b, you can create a solo 401k and put close to max employer contribution to yourself (20% of net if sole prop) as it’s a separate employer or do mega backdoor through Emparian or Employee Fiduciary to get all of the “additional employer side space”. This gets tricky if you are a partner in the W2 income…

If you are married, you could also do the same profit sharing to spouse in a solo 401k.

 

[deleted87051]

When you employ your spouse, what do you call them and how much do you pay them? Bookkeeper, therapist, masseuse? 50k, 100K, 150k??

 

[maxxor]

“Practice manager” Have them sign stuff as that title.

 

[deleted87051]

“Practice manager” Have them sign stuff as that title.

What would they sign? Locums contracts?

 

[sevoflurane]

Ive only ever been 1099 and with trump back maybe you can get the SUV deduction again with 100% bonus deprec included. Some places they cant control their 401k investments or are limited so they do some through their side gig and have access to everything. Aside from health insurance write offs, business trips, office furniture/equipment, employing kids/spouse to get some 401k deductions, the CBP is the biggest write off if esp if your in the last several years of work.

Incorrect. As of now it’s being phased out. I think 2025 is 40%.
Trump has said he is trying to go back to 100% however, and as I understand it, it will be retroactive for 2025. If it doesn’t pass, then next year will be 20% if I remember correclty.

 

[maxxor]

What would they sign? Locums contracts?

Those. Act as credentialing agent. All the 401k or bookkeeping stuff.

There’s a surprising amount of junk that needs signed by an authorized agent for a solo 401k

 

[finalpsychyear]

Incorrect. As of now it’s being phased out. I think 2025 is 40%.
Trump has said he is trying to go back to 100% however, and as I understand it, it will be retroactive for 2025. If it doesn’t pass, then next year will be 20% if I remember correclty.

Yeah but even if doesn't come back you can still depreciate the entire purchase over 4-5 years or something so you still get it in a way just not immediately. There are people who travel to foreigh countries and do CME from some online place sorta created to document that stuff for people doing international travel and I guess right off sone portion of that trip so not sure i would do that.

 

[sevoflurane]

Yeah but even if doesn't come back you can still depreciate the entire purchase over 4-5 years or something so you still get it in a way just not immediately. There are people who travel to foreigh countries and do CME from some online place sorta created to document that stuff for people doing international travel and I guess right off sone portion of that trip so not sure i would do that.

Dude… 100% depreciation year “0” is much better than over 5 years.

 

[gunnershow]

Dude… 100% depreciation year “0” is much better than over 5 years.

I never got this scam tbh. To bonus depreciate 100% in year 1, don't you have to claim 100% business use for not only year 1 but also years 2-5?

 

[aneftp]

I never got this scam tbh. To bonus depreciate 100% in year 1, don't you have to claim 100% business use for not only year 1 but also years 2-5?

Stormy Daniels ….

Lots of half truths in many business deductions including percentage usage for section 179 for business.

On the lease side. U can accelerate the full 3 years lease payments and prepay it and deduct the lease up front (especially in years you made too much)

So many tricks in the business world.

 

[sevoflurane]

I never got this scam tbh. To bonus depreciate 100% in year 1, don't you have to claim 100% business use for not only year 1 but also years 2-5?

not a scam.
irs179 is used a TON in all sorts of businesses.