I've just starting reading about solo 401k and SEP IRA's and want to try and take advantage of some of these opportunities.
Current situation: I am a medical resident who is currently maxing out hospital 401k, Roths, HSA, etc... I am starting to make some money on the side this year. At this point it is just surveys, but I'm hoping to begin moonlighting next year and possibly more money consulting when I am an attending. While my contributions this year will be minimal, every little bit helps and it will also allow me to understand the interworkings of each type of account and how to contribute.
-Expected $ from survey company 1: $1100
-Expected $ from survey company 2: $400
-Expected $ from survey company 3: $200
Questions:
1) Companies 2 and 3 state that with such low amounts of money (below $600), they won't even be sending in tax forms for the IRS. Do I still have to report it, and pending that response, will that $600 be factored into the solo401k/SEP or does it have to only be on the $1100.
2) Is it better to start a solo 401k vs SEP? My understanding is solo 401k is more work (paperwork, fees) but will allow you to do backdoor Roth and has other advantages over a SEP. While backdoor roth isn't needed this year, starting in 2018 it will be an issue.
3) What is the process you actually go through to contribute to each of these accounts? For instance, if I make $300 one month, $50 the next, then $0 the third month, how do I go about contributing? Do I just forward money from my bank account into my solo401k/SEP each month based upon how much I earn (I think 25%), wait until the end of the year, etc... For instance, do I just submit $75 for month one (300*0.25), $12.5 for month two (50*0.25), $0 for month three? Or do most people wait until the end of the year, add up all the checks received and then make one contribution?
4) Any best resources/books/forum posts that will help me walk through the step by step in how to do this?
Thank you.