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This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

The Greatest Small Business Retirement Plans for those with Sideline Income

Do you own a small business? Many professors make “sideline income” outside of their pay from their college/university. This income may come from consulting fees, book deals or entrepreneurial endeavors. Did you know there are ways to maximize retirement savings with this income? Let’s look at the best options.

SEP IRA

First up, we have the simplified employee pension IRA, or SEP IRA. One of the main benefits for this plan is that you can establish one up to the tax filing date (April 17th in 2018) to make contributions for the previous year. Thus, if you find that you’ll owe a larger tax bill than normal, you can contribute more to the plan to reduce that tax bill.

All SEP contributions are made by the employer. Furthermore, the employer isn’t required to make contributions each year. But if any contribution is made, it must be made for all participants (and there can be many). Contributions are deductible as a business expense. Contributions to a SEP IRA cannot exceed the lesser of: 25% of the employee’s compensation, or $54,000 for 2017. Elective salary deferrals and catch-up contributions are not permitted. Contributions are pre-tax and grow tax-deferred.

Pro-tip:  You can establish and utilize SEP IRA contributions even though you max out employee contributions in a 403(b) at your higher ed institution.

 

9 Ways Your 403b Provider is Dropping the Ball

9 Ways That 403(b) Providers are Dropping the Ball

403(b) providers should be doing much more when it comes to helping you with your personal finances. Check out my whitepaper of the 9 Ways that 403(b) Providers are Dropping the Ball. You’ll also get access to my Lifestage Planning Guide for Higher Ed Employees and more.

Individual 401(k)

Individual 401(k)s are great for sole proprietors. This plan type is often called a ‘Single-K’, ‘Solo K’, or ‘One-Participant K’. This plan can cover the business owner and a spouse, but no other employees. Typically, you can contribute $18,000 in employee elective contributions each year, jumping to $24,000 if over 50. You can then also make employer contributions in the form of profit-sharing. The profit-sharing component can be up to 25% of compensation (as defined by the plan) but cannot exceed $54,000 (or $60k if using catch-up contributions).

What you must keep in mind here is that your elective deferrals are aggregated across different plans, but your employer contributions are not. This means that if you max out a 403(b) at your higher ed institution, you cannot make employee elective contributions. However, if you earned $50,000 in wages from your “sideline”  LLC, you could still make a profit-sharing contribution of $12,500*. This contribution is pre-tax and grows tax-deferred.

*This can be a great way to save more money without incurring an exorbitant tax bill. You should always work closely with your accountant when using profit-sharing.

 

Defined Benefit Plan (Cash Balance Plan)

If you are a business owner capable of investing $100,000 a year or more, this plan can help you do so tax-deferred. If you are an ultra-high earner, you could tack these plans on top of your 401(k)/403(b)’s to make pre-tax contributions of up to $250,000+. These plans are more complicated and more much more expensive. However, for a business owner that earns well over $200,000, these plans can help you to avoid skyrocketing tax bills and build wealth very quickly.

Feel like you are ready to remove the guesswork from your sideline income? I hope so! These small business plans can help you to reduce your yearly tax bill while saving like a boss and building extreme wealth. Cheers!

You may also like: Can I Contribute to Both a 403(b) and a 457 Plan?

Securities America and its representatives do not provide tax advice; therefore it is important to coordinate with your tax advisor regarding your specific situation.
Nick Vail is a co-founder and independent financial advisor with Integrity Wealth Advisors in Indianapolis. He started Remove The Guesswork to empower people to stop guessing when it comes to their finances and to start PLANNING. You can learn more about him here. Are you interested in working with Nick?

By | 2017-07-24T16:32:45+00:00 June 7th, 2017|Categories: Higher Education|Tags: , , |0 Comments

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