Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-11-2016, 07:17 AM   #61
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,448
Quote:
Originally Posted by Rustward View Post
About two years ago in this thread http://www.early-retirement.org/foru...xes-75914.html

You posted this:


If these numbers are still close, perhaps you could afford a few hundred dollars to talk with a tax specialist, CPA, or other professional who could tell you all of your options.

Yes, boo hoo 4 u.
I am crying for you.
You have been dealt such a tragic hardship.
No human should ever have to endure something as torturous as this.

Who can afford to live on so little? And now you might have to pay a little more in taxes? It's just not right!
You're right, I should be thrilled to pay another $15k/year in tax for no reason.
soupcxan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-11-2016, 07:34 AM   #62
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
Quote:
Originally Posted by soupcxan View Post
You're right, I should be thrilled to pay another $15k/year in tax for no reason.
I just cannot fathom this opportunity resulting in less after tax spending money.

Anyone that makes LESS money being self employed and working for the same company, than being employed as a W2 worker, has a fool for a tax accountant.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 12-11-2016, 08:00 AM   #63
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 48,178
Quote:
Originally Posted by Senator View Post
Anyone that makes LESS money being self employed and working for the same company, than being employed as a W2 worker, has a fool for a tax accountant.
How many W2 workers do you think have a tax accountant?
__________________
Numbers is hard

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-11-2016, 08:11 AM   #64
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 7,805
If you pay 86K in taxes you should have a tax accountant....
ivinsfan is offline   Reply With Quote
Old 12-11-2016, 08:12 AM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2014
Posts: 5,090
Quote:
Originally Posted by Senator View Post

Anyone that makes LESS money being self employed and working for the same company, than being employed as a W2 worker, has a fool for a tax accountant.
How about:

1. Salary doesn't change but you now owe the Self-Employed portion of Social Security contributions.
2. Company no longer pays any portion of your health insurance. Yes, the premiums are deductible but that likely will not make up for loss of that subsidy.
3. The OP has said his wife will get a 401(k) match, but typical contract workers don't have that. SEP IRAs have generous maximum contributions but there's no Roth version.

The OP's wife's employer is doing this because it lowers their personnel expenses. One way or another those expenses land on the backs of the "partners".
athena53 is online now   Reply With Quote
Old 12-11-2016, 08:14 AM   #66
Thinks s/he gets paid by the post
 
Join Date: Dec 2015
Posts: 2,228
Quote:
Originally Posted by pjm-7 View Post
I worked for a government agency (not federal). An independent contractor is free of control and direction by contract and by fact. Just because the employer makes someone sign a contract that in and of itself does not make the person independent. There must be a "material" fact. Also, the person must hold him or herself out to the public to be independent. Does this independent contractor have their own business cards, website and maintain their own professional licensing? Does the contractor set the rate of pay?

There are plenty more tests that need to be met, this is just a summation.
Pretty much what my understanding was. And yet, in dentistry, and it's likely not unique, the trend is towards making what really are employees, ICs. They work in one place, they do not meet any of these tests.

I have yet to hear of any of these arrangements being challenged.
HadEnuff is offline   Reply With Quote
Old 12-11-2016, 08:21 AM   #67
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,134
Quote:
Originally Posted by soupcxan View Post
You don't get a share of the profits unless you put up six-figures of cash to buy in. And that is it's own can of worms.

That's why I'm asking...is it even worth working here anymore?
If she is an attorney she can probably find another job paying $200K/yr. In the mean time, $200K is a lot of money even with a little more tax so it's certainly worth staying until she can find a different job that suits her better.
aaronc879 is offline   Reply With Quote
Old 12-11-2016, 09:44 AM   #68
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,687
Quote:
Originally Posted by REWahoo View Post
How many W2 workers do you think have a tax accountant?
I do
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 12-11-2016, 09:46 AM   #69
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,687
Quote:
Originally Posted by Rustward View Post

Yes, boo hoo 4 u.
I am crying for you.
You have been dealt such a tragic hardship.
No human should ever have to endure something as torturous as this.

Who can afford to live on so little? And now you might have to pay a little more in taxes? It's just not right!
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 12-11-2016, 09:47 AM   #70
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 48,178
Quote:
Originally Posted by Big_Hitter View Post
I do
OK, that's one. What percent of the remaining 100+ million have one?
__________________
Numbers is hard

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-11-2016, 09:53 AM   #71
Thinks s/he gets paid by the post
 
Join Date: Dec 2015
Posts: 2,228
Quote:
Originally Posted by REWahoo View Post
How many W2 workers do you think have a tax accountant?
Quote:
Originally Posted by ivinsfan View Post
If you pay 86K in taxes you should have a tax accountant....
Quote:
Originally Posted by Big_Hitter View Post
I do
Quote:
Originally Posted by REWahoo View Post
OK, that's one. What percent of the remaining 100+ million have one?
Well, most of that 100+ million may not benefit from having a tax accountant, but for someone paying 86K, and facing the decisions that OP and his DW are facing, it's a very good suggestion.
HadEnuff is offline   Reply With Quote
Old 12-11-2016, 09:55 AM   #72
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
Quote:
Originally Posted by athena53 View Post
How about:

1. Salary doesn't change but you now owe the Self-Employed portion of Social Security contributions.
2. Company no longer pays any portion of your health insurance. Yes, the premiums are deductible but that likely will not make up for loss of that subsidy.
3. The OP has said his wife will get a 401(k) match, but typical contract workers don't have that. SEP IRAs have generous maximum contributions but there's no Roth version.

The OP's wife's employer is doing this because it lowers their personnel expenses. One way or another those expenses land on the backs of the "partners".
How about you take the money in as "Gross Revenue", not salary.
How about you deduct MANY business deductions, BEFORE you pay anyone.
How about you set up a SEP or similar to reduce taxable income.
How about you pay a wage of 60% of what is left, and take the rest as a 40% dividend, without any SE taxes.

You cannot make anyone smart enough to run a business, so it maybe be time to take a different job.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 12-11-2016, 09:57 AM   #73
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,687
Quote:
Originally Posted by REWahoo View Post
OK, that's one. What percent of the remaining 100+ million have one?
my boss uses my accountant too (clifton larsen allen), so that's two
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 12-11-2016, 11:28 AM   #74
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
Quote:
Originally Posted by REWahoo View Post
OK, that's one. What percent of the remaining 100+ million have one?
No one needs an accountant,. They can read and understand the laws themselves. Of course, it maybe more expensive that way.

There is a huge issue with the tax laws when a common man cannot understand them.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 12-11-2016, 11:46 AM   #75
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,472
Quote:
Originally Posted by REWahoo View Post
OK, that's one. What percent of the remaining 100+ million have one?
Just about everyone I know has one. So, add another 25 or so to the headcount.

Quote:
Originally Posted by Senator View Post
No one needs an accountant,. Of course, it maybe more expensive that way.
Yeah, like really, really expensive!!!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 12-11-2016, 12:05 PM   #76
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 12,250
Senator - it appears you are assuming the OP's wife will be categorized as "self employed" - where all those nice tax benefits you mention come into play. But it seems she's being categorized as 'non-equity partner'..... NOT self employed. The benefits you talk about (SEP etc) don't apply. She'll still have 401k and not be SEP qualified.

Given the high income of this situation - I think I'd be talking to a tax accountant or tax attorney... or perhaps even an employment attorney. It sounds like OP's wife might be an attorney herself - but probably not specializing in tax or employment.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
rodi is offline   Reply With Quote
Old 12-11-2016, 12:14 PM   #77
Thinks s/he gets paid by the post
 
Join Date: Dec 2015
Posts: 2,228
Quote:
Originally Posted by rodi View Post
Senator - it appears you are assuming the OP's wife will be categorized as "self employed" - where all those nice tax benefits you mention come into play. But it seems she's being categorized as 'non-equity partner'..... NOT self employed. The benefits you talk about (SEP etc) don't apply. She'll still have 401k and not be SEP qualified.

Given the high income of this situation - I think I'd be talking to a tax accountant or tax attorney... or perhaps even an employment attorney. It sounds like OP's wife might be an attorney herself - but probably not specializing in tax or employment.
agree. If for no other reason than to deeply understand exactly how much this new arrangement is likely to cost the OP's DW, as well as what avenues may exist to mitigate that cost.
HadEnuff is offline   Reply With Quote
Old 12-11-2016, 12:52 PM   #78
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2014
Posts: 5,090
Quote:
Originally Posted by Senator View Post
How about you take the money in as "Gross Revenue", not salary.
How about you deduct MANY business deductions, BEFORE you pay anyone.
How about you set up a SEP or similar to reduce taxable income.
How about you pay a wage of 60% of what is left, and take the rest as a 40% dividend, without any SE taxes.
Yes, I can see how that would work out to her advantage, but I doubt she'll have much say in how her income is structured for tax purposes. Good question to ask the employer, though.
athena53 is online now   Reply With Quote
Old 12-11-2016, 01:18 PM   #79
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,677
Quote:
Originally Posted by soupcxan View Post
You're right, I should be thrilled to pay another $15k/year in tax for no reason.
Soup: You don't seem to get it, so I will explain.

YOU AND YOUR SIGNIFICANT OTHER ARE EXTREMELY FORTUNATE TO EARN WHAT YOU EARN.

The fact that you have to pay some taxes should not matter so much.

If your income is what you said it is, 15K is not so much that y'all are getting screwed.

Be thankful for what you have, and quit whining about taxes.

15 years ago our income peeked at 200K on which we paid 47K in federal taxes. I was self employed and paid all the SS and Medicare taxes on top of that, and I did not complain. Actually it was a gift to earn enough to have to pay those taxes.

You need to grow up.

I apologize to the rest of the forum for ranting.
Rustward is offline   Reply With Quote
Old 12-11-2016, 01:25 PM   #80
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,687
Quote:
Originally Posted by Rustward View Post
Soup: You don't seem to get it, so I will explain.

YOU AND YOUR SIGNIFICANT OTHER ARE EXTREMELY FORTUNATE TO EARN WHAT YOU EARN.

The fact that you have to pay some taxes should not matter so much.

If your income is what you said it is, 15K is not so much that y'all are getting screwed.

Be thankful for what you have, and quit whining about taxes.

15 years ago our income peeked at 200K on which we paid 47K in federal taxes. I was self employed and paid all the SS and Medicare taxes on top of that, and I did not complain. Actually it was a gift to earn enough to have to pay those taxes.

You need to grow up.

I apologize to the rest of the forum for ranting.
the OPs income level has nothing to do with this
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
2012 FIRE - Just hit a huge pothole jwkde Life after FIRE 21 02-15-2011 06:03 PM
(FAQ archive) Retirement plans the self employed and those with multiple employers Martha Early Retirement FAQs 0 10-19-2007 02:22 PM
Am I Self-Employed, Un-Employed or Retired? Trek Life after FIRE 16 06-20-2007 08:55 AM
Wharton: "Giving Employees What They Want: The Returns Are Huge " Nords Young Dreamers 8 01-02-2006 04:12 PM
401k ?'s and tax implications for self-employed.... thefed FIRE and Money 6 12-17-2005 09:42 PM

» Quick Links

 
All times are GMT -6. The time now is 06:24 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.