3 ms·
When I contracted in 2018, I paid $650-700/month for a pretty good "silver" insurance plan covering my wife (34 then) and I (39 then). Definitely varies by stat
by neogodless 6y ago
When I contracted in 2018, I paid $650-700/month for a pretty good "silver" insurance plan covering my wife (34 then) and I (39 then). Definitely varies by state and availability of insurers. But it was by choice... 1099 rate easily covered all taxes and insurance with room to spare and allowed be to set up a solo LLC and dump a buttload of pre-tax money into a 401(k)... About $53k in one year.
Taking time off was hard for me mentally with that high rate, knowing how much gross income I'd give up to take a week off for a trip.
- jsjohnst 6y ago> dump a buttload of pre-tax money into a 401(k)... About $53k in one year. That’s like double the IRS allowed maximum for pre-tax 401k deferral in a year, no? This is not my area of expertise so I could easily be unaware of something. Can you explain how you did this as I’m genuinely curious and want to do the same.
- neogodless 6y agonp-1 has it right. As a small business employing yourself, you can "profit share" much more than the $19k individual limit.
- JauntTrooper 6y agoThere's something that's often referred to as the "Mega Backdoor Roth" that lets you shelter an extra $37,500 per year beyond the traditional 401(k) limits.
- mercutio2 6y agoTrue, but that tax sheltering is of future income, it's not pre-tax in the normal-employee case.
- np- 6y agoThere is a separate, higher IRS max for employee+employer contribution (this is why many jobs can offer 401k matching), and that number is somewhere around $55k these days. But there is a loophole—when you are your own employer, i.e. self employed, you can contribute that full amount to your own 401k.