Situation-
W2 income is greater than 170 K - so FICA is maxed there, deductible 401K is maxed there as well
Now there is additional 250K Self employed as LLC
CA resident
Things to consider :
1. Pass through tax credit - is it availabe for Schedule C filer ? or you need S-corp
2. Solo 401k deduction as employer contribution - For LLC (sole prop) - total putaway can by ~50K ( 20% of income),assuming no salary is taken in S-corp can i still put away 50K as employer contribution
3. State fee for LLC fee - $1700 , for S-Corp it is 1.5% ( $3750)
4. LLC Medicare tax paid 3.8% - $9500, S- Corp - None as it is pass thru
Does it make sense to be S-corp? With zero or minimal salary
