For 2018: So net income $35K, salary $0, distribution $19K.
I plan to meet with cpa (just waiting to get my new laptop up to speed with back up drive) to discuss salary etc for 2019.August 13, 2019 at 6:40 am MST #238534jacoavluModeratorStatus: Physician, Small Business OwnerPosts: 2282Joined: 03/01/2018
How much yearly 1099 income anticipated going forward
The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVAPedsParticipantStatus: PhysicianPosts: 4240Joined: 01/08/2016
how can one justify a salary of 0 for doing telemedicine work?August 13, 2019 at 7:18 am MST #238544
Projected income 2019: at least $175K.
I can’t remember exactly what my cpa said but I think he said the first year was reported as no salary for so little income. He initially listed my income as $23k and he had to amend it after I realized he didn’t put the right number from my 1099.
I can’t estimate expenses right now without my laptop.
Thanks for your thoughts.August 13, 2019 at 7:24 am MST #238545jacoavluModeratorStatus: Physician, Small Business OwnerPosts: 2282Joined: 03/01/2018
S Corp for a side hustle is almost always wrong when you have wages in employed position that exceeds the social security wage base, which you do
because you will pay excess 6.2% SS tax from the Corp on any wages to you from the Corp. Which you would not pay as a sole prop.
Retirement contributions from Corp 401k only come from wages. Not distributions. So low salary equals low 401k contributions.
Also an unreasonably low salary (certainly any salary that is less than distributions) is an aggressive accounting tactic which may May result in attention from IRS.
The S Corp also makes running solo 401k more complex. Everything more complex. Payroll. Additional accounting costs. Corp tax return. Possible state entity taxes.
The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA