Employed couple after being self-employed - need new investment plan

[Spondulix]

DH and I are spent most of our careers self-employed, but now we are both in full-time jobs. My salary is $150k and DH is ~$80k. Our accountant suggested filing "married filing separately" from now on. We both have Roth IRAs and SEP IRAs, but no traditional IRA.

Looking at the investment checklist: Our emergency fund is fully-funded, no debt (other than mortgage). HSA balance is above $10k so not sure it makes sense to make contributions. I am currently maxing out my 401k, and DH is still in a grace period on his (recently started the job).

Questions:
1. For me: is the next step to create a Traditional IRA and max it out?
2. For DH: should he contribute to Roth IRA or start a Traditional IRA?
3. When would it be in our benefit to do a Backdoor Roth vs IRA contribution?
4. I don't understand the nuance of why you wouldn't max out of a 401k, if there's any good resources or explination

[Telecaster]

DH and I are spent most of our careers self-employed, but now we are both in full-time jobs. My salary is $150k and DH is ~$80k. Our accountant suggested filing "married filing separately" from now on. We both have Roth IRAs and SEP IRAs, but no traditional IRA.

Looking at the investment checklist: Our emergency fund is fully-funded, no debt (other than mortgage). HSA balance is above $10k so not sure it makes sense to make contributions. I am currently maxing out my 401k, and DH is still in a grace period on his (recently started the job).

Questions:
1. For me: is the next step to create a Traditional IRA and max it out?
2. For DH: should he contribute to Roth IRA or start a Traditional IRA?
3. When would it be in our benefit to do a Backdoor Roth vs IRA contribution?
4. I don't understand the nuance of why you wouldn't max out of a 401k, if there's any good resources or explination

I don't understand the value of "married filing separately" so I'll leave that to those with more knowledge.

But contributing to an HSA is almost always a great idea, because...well, this link explains it better than I was going to: 

https://www.madfientist.com/ultimate-retirement-account/

[terran]

Unless you have some unique situation like student loans you're trying to get forgiven and want to minimize payments in the meantime I'd really question the suggestion to file married filing separately. It's rarely the best choice. Why did you accountant suggest this?

You're over the income limit to deduct traditional IRA contributions since you're covered by a retirement plan at work and your husband may be too unless neither he nor his employer contributes to a workplace retirement plan (including the SEP IRA) and your income is from part of the year keep your MAGI under the limit.

You're likely also over the income limit for Roth IRA contributions.

Contributing to a backdoor Roth IRA would be a good idea except that much of the conversion from traditional to Roth will likely be taxable as any conversion is split in proportion between the non-deductible contribution and any previously deducted IRA balances, which includes SEP IRA. You may be able to roll the SEP into your 401(k), so you could ask about that. If you still have any self employment income you could consider opening a solo 401(k) that you could roll the SEP into into.

The only reason I would think twice about maxing out a 401(k) would be if it had high fees and/or terrible investment options.

[Spondulix]

Unless you have some unique situation like student loans you're trying to get forgiven and want to minimize payments in the meantime I'd really question the suggestion to file married filing separately. It's rarely the best choice. Why did you accountant suggest this?

I'm not sure why - I'll have to ask! I'll have some 1099 income also, but I'm sure it'll be totally diluted by expenses. Typically when we file, there's two Schedule Cs, so it's treated like two separate businesses, but still filing jointly.

[Spondulix]

But contributing to an HSA is almost always a great idea, because...well, this link explains it better than I was going to: 

https://www.madfientist.com/ultimate-retirement-account/

Wow, that's a great link. I guess my plan is technically an HRA (Health Reimbursement Arrangement) so I may not be eligible for an HSA. I'll have to look into that.

[Sibley]

MFS can make sense for a couple when one has very high earnings and one has much lower earnings. I wouldn't necessarily peg you as having enough of a difference to make it advantageous though. There's a lot of downsides to doing MFS, so I would ask for your return to be calculated both ways and then to compare. Given that the accountant suggested it, they should be able to back it up with numbers.

[Proud Foot]

Unless you have some unique situation like student loans you're trying to get forgiven and want to minimize payments in the meantime I'd really question the suggestion to file married filing separately. It's rarely the best choice. Why did you accountant suggest this?

I'm not sure why - I'll have to ask! I'll have some 1099 income also, but I'm sure it'll be totally diluted by expenses. Typically when we file, there's two Schedule Cs, so it's treated like two separate businesses, but still filing jointly.

Definitely ask the accountant why MFS is a better option. There are a lot of credits/deductions that a MFS status makes you ineligible for which may or may not actually impact your individual situation. It is possible you would not be eligible for them even if you filed as MFJ.