Hi, all. Just picked up the Bogleheads investing book today and only got 10% through before following the link to this forum. I did some research on the forum before posting this question, as well. I'm not finding anything concise enough, for my situation, to get me started on the right path.
Investing Background: Sadly and embarrassed to say, I have no investing background and was not raised in a family/circle of friends who encouraged it. Having said that, I'm well aware of the importance and in a good place in life (financially) to be very proactive about it. I have a very late start being 37 years old.
I have an LLC and we are two Managing Partners that are 50/50. We have just passed the one year mark and as the end of the year is closing, we are motivated to start our Roth IRA, 401k, etc. A big motivation, aside from planning for retirement, is tax benefits. We are in the software development space and will be grossing $350k this year. We recently hired a CPA (consultant) and the first thing she suggested was that we should write a letter to the IRS and request that we are taxed as an S-Corp. That was sent a couple weeks ago and we are keeping our fingers crossed. We will also be asking this question to her next week, but I would like more than one opinion, which is why I'm posting here. I really want to wrap my head around this to ensure we are moving in the right direction and making smart moves.
What would be the first steps to getting this setup to where we can maximize tax breaks before the year end? I'm looking at the Individual 401k from Vanguard (because we are two partners with no common-law employees). Am I right that we can each invest up-to $53k into our individual 401k? Is that tax-free? I feel really ignorant writing this guys, I know I have a lot of research to do! If i'm missing any crucial info here to get some sound input, please let me know.
Thank you kindly in advance.
Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
1 post • Page 1 of 1