Your choices are:
SEP
Simple
Individual 401k
Individual ROTH 401kUsing hypothetical figures, let's say your LLC entity has 30,000 in taxable income after expenses. What is the minimum you can pay yourself and stay in the good graces of the IRS (what you pay yourself incurs a 16.8% pay roll tax hit, which is bad) if you
optimize what you put in a tax deferred retirement account?
It looks like the Vanguard Individual 401k is the way to go in this case.
https://investor.vanguard.com/what-we-offer/small-business/compare-plans?Link=facetHere is what I would do: It looks like I can put in $17,500 on my personal end (and avoid pay roll taxes?) and my LLC can put in up to $52,000 for me and get a 25% deduction.
So, of the $30,000, I should send $17,500 to the 401k.
That leaves $12,500 of taxable income.
I would then just have to pay myself $12,500 as an employee.
If I didn't need the money, I could put another $10,000 more into the 401k and get another $2500 tax deduction. I now just owe pay roll taxes AND regular earned income taxes on $10,000 for the year.
Have I optimized it? What would you do?
Ready...go...