Hi All,
Sometime in 2018, probably around May, I will start freelancing. I currently work a w-2 PT job between 20-25 hrs a week averaging about $3,500 take home a month, benefits include $1500 in CE, and about $2,000 in fees and dues, and about $1,500 in services through the company. I do not have insurance through my current job, and the 401k is dismal so we don't utilise it.
Freelance rates in my area for my profession are $75-90/hr and there is a large demand leading to pretty flexible scheduling and terms. I will probably continue to work 20ish hours a week on average. To complicate things I may also teach one or two classes a semester at a local college next fall, that would be w-2 work.
Currently MFJ in the 25% tax bracket, this is variable year to year due to bonuses and we will probably fall in the 12% bracket if the proposed tax bill goes through. State tax 5.5%.
While I know things will change if any tax reform is passed I'm looking to educate myself a little since I have no idea about this area of finance. I really like our accountant but he is retiring after this tax season. So I'm hoping someone can point me toward some resources.
An individual in the same profession advised that she has an LLC, and does an s-corp election for taxes. She pays herself $2,000/month salary so she can contribute to a solo 401k and then take an owner draw quarterly. It would be phenomenal to have a second 401k that was worth contributing too, we currently utilise my husbands HSA and 401k.
Any advise or thoughts are appreciated! thanks!