Author Topic: Can brokerages help me with small business tax and retirement?  (Read 1063 times)

misterno

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Can brokerages help me with small business tax and retirement?
« on: September 09, 2015, 03:19:07 PM »
Income from 9-5 job: 110K

Income from side business: 35K (sole proprietorship)

401k : 120K (empower which was Putnam) All in Putnam 500 SP Index fund

Regular IRA : ~30K (Vanguard) All in VSGAX

No mortgage, house is all paid for.

Spouse not working and have 1 child.
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I wish I can find a one shop solution where my

1-checking account
2-IRA
3-Small business structure ( I want to convert my business from sole proprietorship to S-corp)
4-Small business tax (should I add my wife to the business as partner? and annual tax filing)
5-Business 401k or SEP IRA (I don't have it yet but I want to establish one)

all in the same place.
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So who or which brokerage can give me all this?

I went to Fidelity last month to ask questions about 3-4-5 but the help was very superficial not as deep as I wanted. Basically they have no tax experts.

Any thoughts?

DavidAnnArbor

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Re: Can brokerages help me with small business tax and retirement?
« Reply #1 on: September 10, 2015, 09:20:02 PM »
This might be better in the Tax Forum. Regarding the side business income, you definitely can put that into a Solo 401(k), both Vanguard and Fidelity are good. You should be able to put almost all of that income in the Solo 401(k) after payroll taxes are taken into account. However, I'm not sure if there is a limit to 401K contributions per person, because you already have a 401(k) at your regular job. This means adding your wife as a partner to your side business would then make sense.
Regarding the S Corp for your side business: that is one way to avoid having to pay some Medicare/Social security taxes. There's threads on the Tax forum regarding this, and what is considered reasonable income as an employee of the S Corp.  Obviously you don't want to do anything too crazy cause the IRS will state you're just trying to avoid payroll taxes.

What all your questions come down to is understanding tax law, you can learn a lot more of this on your own, but you definitely should consult with a CPA regarding the goals of forming the S Corp. for your side business and to make sure you're not making the mistake of going beyond maximum 401(K) contributions allowed. Other questions are will adding your wife as a partner to the side business help with making more of these 401(k) contributions. Your traditional IRA contributions also have income limits. So you need some CPA help with this thicket of issues.

You talk about a small business tax, and I'm not sure if you're talking about your state tax on small business property, or state tax on a C-corporation. Your S-Corporation income is passed onto you and you merely pay federal tax on it, you don't have to pay payroll tax on that portion of income.

misterno

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Re: Can brokerages help me with small business tax and retirement?
« Reply #2 on: September 11, 2015, 08:25:28 AM »
Thanks, I will ask this in the tax forum

ClaycordJCA

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Re: Can brokerages help me with small business tax and retirement?
« Reply #3 on: September 11, 2015, 06:46:05 PM »
You get what you pay for. Brokerages refuse to provide tax advice - they are not tax professionals. I suggest that you consult a business/tax attorney or CPA since tax and corporate formation laws are complex, may vary from state to state and you don't want to be on the wrong end of a large tax bill with interest and penalties. If the lawyer or accountant is wrong, you can sue for malpractice - you can't sue the forum.