Is there a legal way

[pb4uski]

Quote:

Originally Posted by street ^ Yes pb4uski "not" to affect my income. Thanks for paying attention to details. LOL I just looked they offer tax sheltered annuities. I know how many feel about them and I'm not a fan of them either. If I can enter and contribute to one of them I might consider it because I don't need the money and it would be something I could stretch out in payments down the road. Do a tax shelter annuity would be classified as income right?

From what you wrote, it sounds like their tax-deferred option is like a 401k but that the investment option is a deferred annuity? In that case, what you might consider is a combination of maximum deductible IRA contributions ($6,500 for 50 or older) and 401k.. that way you could maximize tax-deferred savings that you can control and minimize the amount going into the deferred annuity.

So for example, if you are over 50 and earn $12,000 a year, defer $5,500 into their 401k and your net pay will be $6,500... make a deductible IRA contribution for $6,500 and your AGI will be zero.

[street]

Quote:

Originally Posted by pb4uski From what you wrote, it sounds like their tax-deferred option is like a 401k but that the investment option is a deferred annuity? In that case, what you might consider is a combination of maximum deductible IRA contributions ($6,500 for 50 or older) and 401k.. that way you could maximize tax-deferred savings that you can control and minimize the amount going into the deferred annuity. So for example, if you are over 50 and earn $12,000 a year, defer $5,500 into their 401k and your net pay will be $6,500... make a deductible IRA contribution for $6,500 and your AGI will be zero.

Thanks again for your guidance. Your example is what I'm after I don't want to claim any income.

I will check with them and see actually what they offer. I do know that they offer a retirement type program because I had to sign something a few years back and I opted out of it. I'm 60 and I would like to contribute everything I make to the retirement fund to defer taxes and show NO income. I also want it to be legal and legit.

[Closet_Gamer]

No clue as to the company structure, but perhaps they could pay you in non-executive stock options or restricted stock units with a future vesting date?

So long as you don’t have “constructive use” of the money and are willing to absorb the risk, I believe that could allow you to defer taxes until the rsu’s vest or the options vest and you exercise them.

Obviously, get legit tax guidance from a pro before you do this.

[sengsational]

This might not be applicable for the OP, but I was wondering (wondering enough to type this but not enough to google it), could you have an LLC and simply not take a salary?

You work, the revenue gets deposited and the expenses get paid, but instead of paying yourself a salary, you simply leave it in the bank, or invest it. Then, later, when controlling AGI is not as much of a problem, you start giving yourself a salary.

[pb4uski]

I don't think so... to my knowledge LLCs are pass-throughs... essentially like a Schedule C.

[Sunset]

OP would need to form a corporation to hold the income, but the big problem would be that it would end up being double taxed (mostly) , and it's a huge headache. Could be worth it if we were talking huge sums of money, but not for the tiny 12K income.

[street]

I checked with the company I work for on a temporary/part time for a few months each summer. They checked and I'm not eligible for any of their retirement programs.

So will have to rethink this gig and what I should do.

[Sunset]

Quote:

Originally Posted by street I checked with the company I work for on a temporary/part time for a few months each summer. They checked and I'm not eligible for any of their retirement programs. So will have to rethink this gig and what I should do.

You can still contribute to a regular IRA , limits are dependent upon age, but probably at least $6K worth.

[street]

I want it to be a tax deferred account. I suppose the company could send it to a financial institution. Of course they would not be able to take taxes out of the money. SS and Medicare tax may come out but not federal/state so it would not be considered income for that year.

[pb4uski]

If you earned $12k and made a $6,500 tIRA contribution then your income would be $5,500. If that is too much, then limit your hours and earnings to $6,500 so your income will be zero.

[marko]

I used to travel abroad about 200 days a year; DW would come with me and the company paid for just about everything. Food, transport, entertainment, lodging, most weekend expenses etc. We banked quite a bit over those 20+ years as a result.

There was talk at the time of the IRS considering it taxable but it never went anywhere.

One of my co-workers was going through a divorce and his soon-to-be ex's lawyer argued that his travel was 'income' because he wasn't spending his own living expenses but again, it never went anywhere.

[Philliefan33]

Quote:

Originally Posted by pb4uski If you earned $12k and made a $6,500 tIRA contribution then your income would be $5,500. If that is too much, then limit your hours and earnings to $6,500 so your income will be zero.

Don’t forget, you can also make contributions to a spouse’s IRA, bringing the total possible IRA contributions to $13K. (Don’t know if the OP is married)

[street]

pb4uski >>> that is mostly likely what I will do. My objective is to keep my income low so I can receive a lower premium from ACA. If this money doesn't count for income for that year then that what I will do.

Thanks everyone for the advise it all has been very helpful.