409 | 401(k), Mega Backdoor Roth and the Premium Tax Credit | Sean Mullaney

In this episode: w2 employment to self-employment, s-coporations vs self-employment, avoiding penalties, megas backdoor roths, retirement planning, and health insurance. Most of us are familiar with a W2 job, and there is a certain level of convenience that comes with working a W2 job as it relates to retirement planning and taxes. So much so that it can be daunting to want to embark out on your own journey and have to figure it all out on your own. This week we are re-joined by our “in-house tax expert” Sean Mullaney to discuss the tax and retirement sphere as it relates to being self-employed. While we are not offering advice, this week's episode is meant to act as a resource to listeners curious about the steps and unknowns that come with the self-employment territory. With the same excitement and motivations gained from getting to run your own business, those same motivations and excitements can still be applied to navigating your retirement and taxes once you remember that it is now within YOUR control!  The fear of the unfamiliar may not be as daunting and complicated as you may think, and figuring out these factors requires you to take the same initiative and action that is required throughout your entire FI journey!  The discussion is intended to be for general educational purposes and is not tax, legal, or investment advice for any individual. Sean Mullaney: Website: fitaxguy.com Book: Solo 401k; The Solopreneur's Retirement Account Timestamps: 1:42 - Introduction 2:38 - W2 Employment to Self-Employment 11:34 - S-Corporations vs Self-Employment 14:03 - Avoiding Penalties When Making Estimated Payments 19:29 - Saving For Retirement As An Entrepreneur 24:00 - Employee vs Employer 401k Limits and Mega Backdoor Roth 33:54 - Is The Mega Backdoor Plausible For The Self-Employed? 41:03 - Roth IRA Conversions 43:15 - Addressing The Uncertainty Around The Employer Maximum 53:40 - ACA Plans and Navigating Health Insurance As A Solopreneur 63:34 - What Counts As Income? 68:41 - Conclusion Resources Mentioned In Today’s Episode: Paying Taxes When You're Self-Employed IRS Publication 560 IRS Form 8962 Instructions on Premium Tax Credit IRS Publication 974 Premium Tax Credit Creating Your Dream Job | ChooseFI Ep 117R Roth IRA Conversion Ladder Case Study | ChooseFI 163R Healthcare.gov ACA Plans Cody Garrett's Tweet Illustrating ACA Medical Insurance Premiums and PTCs Subscribe to The FI Weekly! More Helpful Links and Resources: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence Keep learning or start a new side hustle with one of our educational courses Commission-Free Investing with M1 Finance