I work on a contract basis and am paid monthly - at the end of each month I submit an invoice, my contract servicing firm process it, and then a few days later, the money is electronically deposited in my account.
So I got my 1099 for 2013 and it is exactly one month too heavy - my contract firm initiated the electronic transfer for December on 12/31/2013. I didn't get the money in my account until January 4th, but for tax reasons apparently that money came in before the end of the year.
Not too worried about the taxes themselves - will pay more for 2013 and less for 2014. What this throws a monkey wrench into, and has me rethinking is my investment strategy for 2014.
I opened the Solo K in 2012 and have been making Roth contributions since then. I have since seen the light and will now be putting everything in on the Traditional side. We paid the house off in December, so this year, we have much more money to invest.
My grand plan with my income was to put 18.5% (this is just a bit under the theoretical maximum allowed - 20% of my income after deducting half of self employment tax - close enough for me) of my checks in the 401K on the employer side, then go with the following priority:
A. Roth IRAs (11K)
B. Employee side of solo K (17.5 K)
C. Taxable account
Nice and clean, easy to implement. Of course, I have already done the January transactions - 18.5% to the SoloK (checked 2014 - have asked if e-Trade can change that), swept the remainder to Roth IRAs.
However, this problem with some of my income unexpectedly moving back to 2013 has me thinking a better way to do this would be:
A. Put all money into Solo K for 2013, until April, waiting to file taxes until then, or when we hit the contribution limit
B. Roth IRAs
C. Solo 401K for 2014
D. Taxable Account (doubt we will get to this step, but there is a chance)
Does this make sense? Would you file for an extension if we cannot fill up the 2013 money by April 15th? We are due a small refund, so normally I would file as soon as all of our paperwork was in, but we could get a much larger refund by packing in as much into 2013 as we can.