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04-24-2017, 01:43 PM
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#21
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Confused about dryer sheets
Join Date: Apr 2017
Location: Springfield
Posts: 1
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Greetings
Hi Novaxterra,
I'm also a contractor in Northern Virginia! DH and I have similar salaries to yours; luckily we both have a 401k available through our employers and max them out. We make too much to deduct additional IRA contributions so we continue to transfer extra money to taxable investment accounts with an eye on growth (mostly low-fee index funds but also some holdings in individual companies, an ETF, a REIT, and a P2P lending account)... yes we pay extra taxes on it (although the occasional declared losses help with that sometimes)...
These other folks seem to know more about factoring in the additional small business... but, happy investing!
NoVaDaydreamer
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04-24-2017, 07:10 PM
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#22
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Recycles dryer sheets
Join Date: Mar 2016
Posts: 85
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My advice, get a financial advisor, someone who is a licensed broker. There are numerous angles you can work, several were mentioned here, that could minimize taxes and maximize money in the market.
The money you spend can be made up quickly and in various ways, depending on the broker.
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04-24-2017, 08:23 PM
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#23
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Thinks s/he gets paid by the post
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 3,165
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A caution about putting all your retirement money in tax deferred accounts. That's what I did. When I hit 70.5, I will always be in at least the 25% tax bracket and later the 28%. If you put a portion of your savings in taxable accounts, you will be much better able to take advantage of tax situations.
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04-24-2017, 08:51 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 3,165
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Quote:
Originally Posted by jmp470
My advice, get a financial advisor, someone who is a licensed broker. There are numerous angles you can work, several were mentioned here, that could minimize taxes and maximize money in the market.
The money you spend can be made up quickly and in various ways, depending on the broker.
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If you do a bit of searching on this forum, I think you will find that a lot of member's experience has been that financial brokers are best at moving a lot of money to their own pockets. There are a few who would agree with you, but not many. The usual advice would be to go to a fee only financial adviser and pay to help set up your retirement and savings plans. Most here will recommend that you do a little research, as Novaxterra is doing, and they can do pretty good and not share a large portion of their savings income with a broker.
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04-25-2017, 01:10 AM
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#25
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Recycles dryer sheets
Join Date: Feb 2017
Location: San Antonio
Posts: 178
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Based on your salary and additional income, a traditional IRA wouldn't provide you any tax advantage based on your income if you are single. see Publication 590-A Contributions to Individual Retirement Arrangements (IRAs) https://www.irs.gov/pub/irs-prior/p590a--2015.pdf
For you side business see Publication 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) https://www.irs.gov/pub/irs-pdf/p560.pdf You may want to ask your current employer if they could set up a plan for their employees since employer plans allow employees to contribute at a higher rate and I believe you would still be limited based on income in your side business. I think employers can set it up with minimal cost impact but the IRS publications will give you a better idea of what is involved and whether or not you need to get professional advice.
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04-25-2017, 03:05 AM
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#26
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Thinks s/he gets paid by the post
Join Date: Dec 2010
Location: Midwest
Posts: 1,789
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Quote:
Originally Posted by Ronstar
Maybe - you should contact a CPA or other professional that can point you in the right direction.
You can open up an IRA with or without having a 401k.
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+1. Money spent on a CPA is money well spent, IMHO. And, it will most likely be tax deductible to your business.
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