Cobra question and 401k question

[vetgirl]

Hello, I recently started my own LLC as a veterinarian and most clinics will pay me as an independent contractor/1099 for my various shifts. I have one hospital that does subtract tax so I'm paid as W-2. Am I still able to open a solo 401k if this is not something they provide?

Also, I am no longer receiving benefits after leaving my previous job and I plan to take advantage of Cobra for my health and dental insurance. Can I write off these payments and deduct them for my LLC?

Thank you!

[Christina71]

It's great that you're thinking about these important financial and tax implications as you start your LLC!

• Yes, you can open a Solo 401(k) even if you have W-2 income from one hospital.
• The W-2 income doesn't prevent you from having a Solo 401(k) for your self-employment income. You just need to ensure your contributions from all sources (W-2 401k and Solo 401k) stay within the IRS limits.  Here are more details for that from the IRS:  401(k) limit increases to $23,500 for 2025
• As for the Cobra, that can not be deducted for the business but it can be used for Itemized deductions. 
• The rules from the IRS state, the insurance plan must be established, or considered to be established, as discussed in the following bullets, under your business.
• For self-employed individuals filing a Schedule C (Form 1040) or Schedule F (Form 1040), a policy can be either in the name of the business or in the name of the individual.

Have a great day, Christina, EA 18+Years

**Say "Thanks" by clicking the thumb icon in a post

**Mark the post that answers your question by clicking on "Mark as Best Answer"