I am a SCorp and just set up my DirectedIRA SoloK! Woot Woot.
Although I would love to hit the $69k cap, I don’t think I will get there. I expect to bill between $230k to $300k this year.
What is the strategy for splitting contributions into my SoloK as Employer vs. Employee contributions? Here are the two options I thought of:
- Start with employer contributions based on the 25% of my already determined reasonable compensation. We decided $80k was my salary so that would be a $20k annual contribution w/o increasing my W-2 and employment taxes (FICA). Than if I have extra money, make employee contributions, this will increase my W-2 and employment taxes but shoveling more money into my savings at the same time.
- Max out my employee contributions up to $23k which increases my W2 to $103k, and then add employer contributions if possible, resulting in an additional ~$25k.
- Some cool algorithm that says $X as Employee than $X as employer?
Is there a calculator out there that helps me pick Roth vs. Traditional? This seems like a opinion based decision that no one really knows what is right because we don’t have a crystal ball to predict tax law in 15 years. My research on this is so split on one way vs another… I wish there was cool spread sheet that would take a few scenarios and compare outcomes for 2x options. Does that exist and I just didn’t find it, or is this what a private consolation will do for me?