Has anyone used Vanguard for their small business 401k? We're considering them for our S-Corp (just me and my husband), but their website isn't super clear about the fees for small plans.

Based on your income level and S-Corp structure, I'd definitely recommend going with a 401k plan that includes profit sharing. This will give you the highest contribution limits compared to SEP IRAs or SIMPLE plans. Here's the breakdown for 2025: Each of you can contribute $23,000 as employee deferrals, plus your S-Corp can make profit sharing contributions up to 25% of your W-2 wages. The total combined limit is $69,000 per person if you're under 50. The key is setting your reasonable salaries correctly. You want them high enough to satisfy IRS requirements but not so high that you're paying unnecessary payroll taxes. For your income levels, you'll probably want salaries around $80-100k each, which would allow significant profit sharing contributions on top of your employee deferrals. One thing to watch out for - make sure you establish the 401k plan before December 31st if you want to make contributions for this tax year. The setup process typically takes 4-6 weeks, so don't wait too long to get started. I'd suggest getting quotes from Fidelity, Vanguard, and Charles Schwab for small business 401k plans. They all have good options for two-person S-Corps and can walk you through the specifics based on your projected income.

one thing nobody mentioned - a lot depends on which states r involved!! some states r SUPER aggressive about claiming residents (looking at u California and New York) while others barely care. where r u now and where u thinking of going?? that makes a huuuge difference in how careful u need 2 be!!

You're smart to think about this ahead of time! One important thing to add - even if you maintain residency in your home state, you'll still need to be aware of the temporary state's rules for non-residents earning income there. Some states have "convenience of employer" rules where they'll tax remote work income even if you're just temporarily present. Also, consider setting up a paper trail that shows your intent to return home. Keep paying bills at your parents' address (even if it's just a small utility or subscription), maintain memberships in local organizations, keep your car registered in your home state, etc. The more ties you maintain, the stronger your case for keeping your original state residency. And definitely keep that detailed calendar someone mentioned - not just for tax purposes, but because if you do need to file as a part-year resident anywhere, you'll need to know exactly how much income was earned in each state during your time there.

I've been self-employed in Texas for 5 years now and the best advice I can give is to set aside 25-30% of your earnings right away in a separate savings account. That way when tax time comes, you're not scrambling. Also, don't forget that Texas has no state income tax, which is one less thing to worry about compared to folks in other states!

The safe harbor rule that Nina mentioned is huge and could save you from penalties! Since you worked a regular W-2 job through July 2023, there's a good chance you already had enough taxes withheld to meet the safe harbor requirements. Here's what you need to check: Look at your 2022 tax return (Form 1040, line 24) to see your total tax liability. If your 2023 W-2 withholding equals or exceeds that amount, you're completely protected from underpayment penalties regardless of when you pay your self-employment taxes. For your situation with $5600 in self-employment income from October-December, you're looking at roughly $861 in self-employment tax (15.3%) plus regular income tax on that amount. If your W-2 withholding already covered your safe harbor requirement, you can simply pay everything when you file your 2023 return by April 15th without any penalties. Going forward for 2024, definitely start making quarterly estimated payments since you'll have self-employment income all year. The 25-30% rule Ruby mentioned is spot on - I'd lean toward 30% to be safe since you'll owe both regular income tax and the 15.3% self-employment tax.

Everyone's giving investment advice, but don't forget the basics: make sure you're calculating your cost basis correctly! If you've reinvested dividends over time, those increase your cost basis and reduce your taxable gains. Same with any fees paid. Also when you sell, specifially identify which shares you're selling rather than using the default FIFO (first in, first out) method. This lets you choose the highest-cost shares to sell, which minimizes your gain. Most brokerages allow this but you have to select it when selling.

Great discussion everyone! One strategy that hasn't been mentioned yet is donating appreciated stock directly to charity if you're charitably inclined. Instead of selling the stock (and paying capital gains tax) then donating cash, you can transfer the appreciated shares directly to a qualified charity. This gives you a double tax benefit: you get to deduct the full fair market value of the stock as a charitable contribution, AND you completely avoid paying capital gains tax on the appreciation. For example, if you bought stock for $10K that's now worth $15K, donating it directly lets you deduct the full $15K while avoiding tax on the $5K gain. You can also consider a donor-advised fund if you want to make the donation this year for tax purposes but decide on specific charities later. Just make sure the stock has been held for more than a year to qualify for the full fair market value deduction.

Just adding my experience - I took short term disability last year after surgery and realized months later that my company had taken taxes out of the payments but I had been paying the STD insurance premiums with after-tax dollars for years! I ended up having to file an amended return to get back about $900 in taxes. If you paid for the STD with after-tax money, double check your W-2 and paystubs. You might be paying taxes you don't actually owe.

I went through something very similar last year and want to share what I learned. The key thing is figuring out how your STD premiums were paid - this makes ALL the difference in how the benefits should be taxed. Here's what you need to check: Look at your pay stubs from before you went on disability and see if there's a line item for "STD" or "Short Term Disability" deductions. If those deductions were taken AFTER taxes were calculated on your gross pay, then the benefits you received should actually be tax-free. For bereavement leave, that's straightforward - it's always considered regular taxable wages since it's just paid time off from your employer. The tricky part is if your employer incorrectly treated tax-free STD benefits as taxable income on your W-2. This is surprisingly common because payroll departments don't always track the premium payment method correctly. If this happened to you, you'd need to get a corrected W-2 or file an amended return. I'd suggest calling your benefits department and specifically asking: "Were my STD premiums deducted pre-tax or after-tax?" Get that answer in writing if possible. If they were after-tax and your employer included the STD payments in your taxable wages, you're probably owed a refund.