Solo 401k & PS Comparison
Original 1099 Income $150,000
W2$60,000
K-1 from S Corp$90,000
Scenario 1 No planning
Scenario 2 Max IRA Contribution
Age ＜ 50
Scenario 3 Max SEP Contribution
Scenario 4 Incorporate
Scenario 5 Incorporate + Max Solo401K
Age ＜ 50
Scenario 6 Incorporate + Combo Defined Benefit Plan
Age ≧ 50
Total Tax
$47,186
$45,304
$39,687
$40,769
$29,132
$16,145
Tax Savings
$0
Perc. Save 0%
-$1,882
Perc. Save 4%
-$7,499
Perc. Save 16%
-$6,417
Perc. Save 14%
-$18,054
Perc. Save 39%
-$31,041
Perc. Save 66%
Tax items
Payroll/ SE Tax
$21,194
$21,194
$21,194
$9,180
$9,180
$9,180
Income Tax
$17,018
$15,786
$12,111
$20,037
$12,138
$3,891
Add Medicare Tax
$0
$0
$0
$0
$0
$0
NIIT
$0
$0
$0
$0
$0
$0
Other Tax(include SDI)
$0
$0
$0
$642
$642
$642
CA Tax
$8,974
$8,324
$6,382
$9,388
$5,875
$1,387
Corp Fee
$0
$0
$0
$1,522
$1,297
$1,045
Total Tax
$47,186
$45,304
$39,687
$40,769
$29,132
$16,145
Contribution
Contribution
$0
-$7,000
-$27,881
$0
-$38,000
-$90,500
Current Disposable Income
$102,814
$97,696
$82,432
$109,231
$82,868
$43,355
Incorporated vs. Sch C
-$6,417
Contribute Solo 401(k) + PS (vs. Incorporated )
-$11,637
Contribute Solo 401(k) + Defined Benefit (vs. Incorporated )
-$24,624
Every $10,000 Solo k/Profit sharing contribution, you can save
$3,062
Every $10,000 Solo k/Defined benefit contribution, you can save
$2,721