Solo consultants, fractional execs, agency owners, and high-end freelancers leave $20K to $50K on the table every year because nobody set up a real retirement plan, modeled QBI, or fought for the home office deduction the right way.
You make great money. You probably max a SEP at 25% and call it a day. There are five better moves on the table and we use them all.
$23,000 employee deferral plus 25% employer profit-share, capped at $69K total ($76,500 if 50+). Lets you shelter way more than a SEP IRA at the same income level. We add a Roth bucket and after-tax for the mega-backdoor where it fits.
IRC §401(k), §415(c); Rev. Proc. 2023-34Simpler than a Solo 401k. 25% of net SE comp up to $69K for 2024. Great if you're a procrastinator, you can fund it up to your filing deadline including extensions. Bad if you ever want a backdoor Roth (pro-rata rule bites). We pick the right vehicle for your situation.
IRC §408(k); §415(c); Form 5305-SEPConsulting is a Specified Service Trade or Business. The 20% deduction phases out between $241,950 to $291,950 single and $483,900 to $583,900 joint for 2024. We use retirement contributions, HSA, charitable giving, and entity structure to land inside the phase-in zone so you keep some or all of it.
IRC §199A(d)(2); Treas. Reg. §1.199A-5Regular and exclusive use, principal place of business. Actual method (% of utilities, mortgage interest, depreciation) almost always beats the $5/sqft simplified method for a real home office. We measure, document, and prep the Form 8829 for audit.
IRC §280A(c)(1); Form 8829; Soliman v. CommissionerBusiness travel meals are 50% deductible. Mixed-purpose trips need primary-purpose proof. We build a mileage and travel log per client and per project so when the IRS asks, you have a timeline, not a vibe.
IRC §162, §274(n); Rev. Proc. 2019-48; Treas. Reg. §1.274-5Past roughly $80K of net SE income, S-Corp election usually pays for itself by trimming SE tax on the distribution portion. We benchmark reasonable comp, run payroll, and file the §1120-S so it's defensible.
IRC §1361; §1402(a); Rev. Rul. 59-221Fractional CFO consultant, $285K net 2024, S-Corp. We maxed Solo 401k profit-share to $61K, captured partial QBI inside the phase-out, and documented a real home office.
$38,400 savedFederal tax reduction in 2024 vs. their prior preparer who only ran a SEP at 18%.