Author Topic: Young and Self employed- where to save and tax help  (Read 2061 times)

kt1

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Young and Self employed- where to save and tax help
« on: February 08, 2013, 10:26:36 AM »

I have a few questions that Im really hoping you can help me with...

Hubs and I both work and we have 2 young children (5 and 1). I am self employed and have recently incoporated my business in hopes of saving a WEE bit in taxes (i currently pay $30k a year)

were pretty frugal (can always be improved) and have recently paid off our own house... and we will have a rental house that we recently bought paid off in a few short months. 
HERES my questions for you.... currently only my husband is saving into a 401k because of the employer match each year.. he puts in $1500 they put in $1500 for a total for $3k a year.   We were trying to figure out exploring the rental market is the way to go. We live in the midwest.. and you can buy a rental house around $35-$45k but the expected rent will only be $650-$750 a month. so were not sure if we should keep investing and growing our rentals or if we should maximize all we can towards a IRA to try and retire early.

1) i really want to use my corporation (we have one employee currently) to fund my retirement but what do you suggest on costs???

2) taxes are a real concern honestly.. I mean I'm paying $30k a year in taxes and thats slightly higher then what Im currently paying my full time employee!!!

Right now I have about $20k in cash funds available but I just dont know what to do with the money for the best ROI..... 1) for short term and 2)for retirement and what to save in so If I retire early I can live off of my funds before age 50.... HELP!

marty998

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Re: Young and Self employed- where to save and tax help
« Reply #1 on: February 08, 2013, 02:56:27 PM »
Another rental would be my pick for the $20k. I wish we could pick up $40k houses that rent for $700/month here.

What sort of business is it? If you are paying 30k in tax then the profits are up around 70-80k correct?

Can you expand the business further? If you can get the profit figure up around 200-300k it could sell for over a mill or more, and that will blow your "what to do with $20k" problem out of the water.


matt_g

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Re: Young and Self employed- where to save and tax help
« Reply #2 on: February 08, 2013, 03:30:08 PM »
If you want to put away more in PRE-TAX retirement accounts, you could setup a SEP-IRA or Individual 401k.  You can also put money into a Roth IRA at any income using the Roth IRA backdoor.  I've heard of people buying rental houses out of their IRA accounts, you should look into that too.