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12-11-2016, 06:17 AM
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#61
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Houston
Posts: 1,448
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Quote:
Originally Posted by Rustward
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!
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You're right, I should be thrilled to pay another $15k/year in tax for no reason.
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12-11-2016, 06:34 AM
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#62
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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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!!
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12-11-2016, 07:00 AM
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#63
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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Quote:
Originally Posted by Senator
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.
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How many W2 workers do you think have a tax accountant?
__________________
Numbers is hard
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12-11-2016, 07:11 AM
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#64
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 9,962
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If you pay 86K in taxes you should have a tax accountant....
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12-11-2016, 07:12 AM
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#65
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,373
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Quote:
Originally Posted by Senator
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.
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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".
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12-11-2016, 07:14 AM
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#66
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 2,232
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Quote:
Originally Posted by pjm-7
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.
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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.
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12-11-2016, 07:21 AM
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#67
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,350
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Quote:
Originally Posted by soupcxan
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?
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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.
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12-11-2016, 08:44 AM
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#68
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by REWahoo
How many W2 workers do you think have a tax accountant?
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I do
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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12-11-2016, 08:46 AM
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#69
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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12-11-2016, 08:47 AM
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#70
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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Quote:
Originally Posted by Big_Hitter
I do
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OK, that's one. What percent of the remaining 100+ million have one?
__________________
Numbers is hard
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12-11-2016, 08:53 AM
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#71
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 2,232
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Quote:
Originally Posted by REWahoo
How many W2 workers do you think have a tax accountant?
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Quote:
Originally Posted by ivinsfan
If you pay 86K in taxes you should have a tax accountant....
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Quote:
Originally Posted by Big_Hitter
I do
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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.
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12-11-2016, 08:55 AM
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#72
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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Quote:
Originally Posted by athena53
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".
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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!!
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12-11-2016, 08:57 AM
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#73
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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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...
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12-11-2016, 10:28 AM
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#74
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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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!!
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12-11-2016, 10:46 AM
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#75
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,421
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Just about everyone I know has one. So, add another 25 or so to the headcount.
Quote:
Originally Posted by Senator
No one needs an accountant,. Of course, it maybe more expensive that way.
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Yeah, like really, really expensive!!!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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12-11-2016, 11:05 AM
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#76
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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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%
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12-11-2016, 11:14 AM
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#77
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 2,232
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Quote:
Originally Posted by rodi
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.
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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.
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12-11-2016, 11:52 AM
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#78
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,373
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Quote:
Originally Posted by Senator
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.
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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.
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12-11-2016, 12:18 PM
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#79
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Thinks s/he gets paid by the post
Join Date: Apr 2006
Posts: 1,684
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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.
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12-11-2016, 12:25 PM
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#80
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by Rustward
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.
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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...
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