A Financial Plan can make you smile!
Surgical sales repwith $400K+ of 1099 income
Before a plan:
- No tax estimates, underpayment penalties ($100K tax bill)
- Underutilizing 401(k) plan
- No strategy to maximize earnings/reduce tax
After a plan:
- Establish a solo 401K for 2024 tax year and get a $69K tax deduction. At a 32% Fed tax bracket and 5.39% GA rate…this saves $25,000+ on 2024 taxes.
- Retroactive IRA contribution, convert to Roth IRA (tax free growth/future income)
- Do the same for his wife and repeat for the 2025 tax year
- Open an LLC and elect to be taxed as an S-Corp
- Set up reasonable salary with the help of a CPA and maximize QBI tax deduction.
- $8K contribution to the 529 plan (max allowed MFJ). No clue if the kid(s) will go to college, but the $ can compound and worst-case scenario $35K can be rolled into a Roth IRA.
- Contribute to a brokerage account with distributions from the S-Corp. Distributions aren’t subject to FICA/payroll tax (15.3%). A brokerage account provides tax diversity in retirement and provides liquidity prior to retirement.
So much more to talk about, but this is a little insight into what we do for small businesses.