My wife and I are self-employed and I own an S-Corp, and my wife is an employee. We've been contributing the max to a solo 401k through the S-Corp. However, due to declining revenue and increasing costs (my accountant will be charging $75 a month for payroll even though we only do it quarterly), I am thinking of folding the S-Corp. Adding in franchise tax, additional tax return, etc., it's getting a little too expensive to justify.
My wife also has house-cleaning and counseling businesses, both sole proprietor. She uses Schedule C's for these. We also max out tIRA's and HSA's, essentially living off her income and saving all we made through the corporation. My question is, can we can each have solo 401ks as self-employed sole proprietors using Schedule C, or do we need a more formal structure like an LLC or S-Corp?
I can't find any good information on this. SEP-IRA could work but wouldn't allow us to contribute as much as we have been. Our next step is even more critical because we plan to switch to ACA for health coverage next year and our current set-up gives us a lot more flexibility to reduce our MAGI through the 401k contributions and 25 percent employer match. Thanks for any suggestions or information.
P.S. I will be discussing this with the accountant but want a better understanding first since I'll be partially "firing" him.
