Side Business Incorporation and Retirement Plan

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Gustie13
Posts: 66
Joined: Tue Jul 24, 2012 7:03 pm

Side Business Incorporation and Retirement Plan

Post by Gustie13 » Mon Jun 09, 2014 8:32 pm

Hello,
I recently started a side business that looks like it will generate an extra $10k/year in earnings/income and I'm looking for advice on incorporation, with an eye towards squirreling away as much of that as possible in a self-employed retirement plan (SEP, Solo 401k, etc).
- I do 98% of the work with the business, but in the future I could potentially bring some relatives on board to help in their free-time (as contractors most likely).
- With the nature of the business, I'm not concerned about Liability.
- The combined MAGI of my fiance and I is ~$150k and we both contribute the max to company 401ks and Roth IRAs.

My initial thought is to keep it simple to begin and start a Sole Proprietorship with a SEP IRA. This will result in self-employed taxes of 15.3% and 20% eligible to be placed in the SEP IRA, if I've done my research right.

Any thoughts or suggestions?

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Hayden
Posts: 1154
Joined: Tue Apr 16, 2013 5:13 pm

Re: Side Business Incorporation and Retirement Plan

Post by Hayden » Wed Jun 11, 2014 8:12 am

My recommendation for a new business owner is to focus your time and energy on growing the business. Do something simple for the retirement plan, like a SEP IRA.

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