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Old 03-27-2011, 06:35 AM   #21
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Originally Posted by bright eyed View Post
Purron, has your DH made any moves since this last post?
Not yet. He retired 3/1/11 and he's taking some time to chill. Plus, we're getting a house ready to sell. I'll keep ya posted!

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Old 03-27-2011, 08:30 AM   #22
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When I FIRE'd in 2009 I had my attorney set up a LLC for my consulting business. Wasn't looking to anything near full time but do have a few clients who basically pay to "pick my brain" on industry issues. Have also served as a witness in a couple of court cases. LLC, S Corp, Incorporation all have their +'s and -'s. Given I have no other employees currently, nor do I intend to in the future, I went with the LLC for its simplicity. Taxes flow through on my individual return, it was cheap to set up with the attorney and my home state. To cover potential liability issues I took out a umbrella liability policy to give me a piece of mind. Although given my consulting business basically covers giving companies my opinions it would be pretty hard for someone to come back at me for something I think! Now if I was offering technical advice on products, etc that could actually put someone in harms way I might rething the whole LLC thing to better shield the rest of my assets.

As for a way to boost retirement accounts and a way to shield money from Uncle Sam's claws I went with a SEP-IRA through Schwab. Very simple to set up and you can basically put in 20% of your income each year with a cap of $49k. The SEP is much simpler than some of the other options (solo 401k, etc) but does have some disadvantages in terms of how much you can sock away

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Old 03-28-2011, 06:41 AM   #23
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In his position, I would not consult without errors and omissions insurance. There are too many assets at risk, making the potential impact of a lawsuit too high.
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Old 03-28-2011, 07:17 AM   #24
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Originally Posted by Ed_The_Gypsy View Post
As noted above, an LLC may not protect you very well.

I have been working through a professional agency who takes a small chunk out of my check, but a smaller one when I find the work, provides professional liability insurance, does the paperwork and does the accounts receivable. One can do all that on one's own, but for a small cut, it takes a lot of the hassle out of consulting.
I also work this way on most gigs. Some companies don't want to deal with individual 1099's and steer you to these places because they are already set up as a preferred vendor. The downside if paid with W2 is it is sometimes tough to shelter income because the 401K has a waiting period.

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