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Posted by JGE on March 19, 2008, 1:31 am
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> > Thanks for all the discussion, but I'm starting to get confused.
> > Let me phrase my question in a completely different way ...
>
> > 1. This year, I'll earn about $30K in a W-2 job.
>
> > 2. I'll also earn about $15K in consulting (1099-MISC).
>
> > 3. I've already max'ed out my 401K ($20,500) from the W-2 job.
>
> > 4. I wish to tax defer as much income as possible.
>
> > How can I best accomplish #4 ?
>
> If you've maxed out your employee contribution at your
> day job, then a solo 401(k) and a SEP-IRA are equal
> in terms of the amount of SE income you can contribute
> and shield from income tax. In other words, the max
> allowed employER contribution to a solo 401(k) is the
> same as the max contribution allowed to a SEP-IRA.
>
> So for 2007, you may as well use the SEP-IRA.
So I can't do both the SEP-IRA *AND* the "solo" 401K ?
So I just contribute the 18.5% (or whatever it is) of net 1099
income to the existing SEP-IRA, and be done with it ?
Thanks !
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