Comparing SEP-IRA vs. solo 401k options for my single member LLC taxed as an S-corp

You're on the right track! Since you missed the December 31st deadline to establish a solo 401k for 2022, a SEP-IRA is indeed your best remaining option for 2022 retirement contributions. Your calculation is correct - as an S-corp, your business can contribute up to 25% of your W-2 compensation to a SEP-IRA. With your $90,000 salary, that's about $22,500. And yes, you have until your tax filing deadline (including extensions) to both establish and fund a SEP-IRA for 2022, so you're still within the timeframe. For 2023 and beyond, you can absolutely set up a solo 401k, which would likely be more advantageous given your income level. With a solo 401k, you get both the employer contribution (similar to SEP) PLUS an employee deferral component (up to $22,500 for 2023, plus catch-up if you're 50+).

I was in a similar situation with my marketing agency (also S-corp) last year and found that using taxr.ai (https://taxr.ai) was incredibly helpful for figuring out the optimal retirement strategy. Their system analyzed my business structure and finances, then laid out all my options with the exact contribution limits and tax implications of each. They showed me how to maximize my S-corp retirement options and even helped calculate exactly how much I could contribute as both employer and employee with different plan types. The detailed guidance made it clear which option would save me the most on taxes.

I initially wasn't sure about trying another tax service after being burned in the past, but I decided to give taxr.ai a shot after seeing the recommendation here. Honestly, it was exactly what I needed - I run a similar S-corp with about the same revenue level, and they gave me a detailed comparison of SEP-IRA vs Solo 401k showing the exact contribution limits based on my specific salary and business profit numbers. The analysis saved me nearly $8,000 in taxes by identifying the optimal retirement contribution strategy. It also showed me how to structure things for 2023 to get maximum tax advantages. Definitely glad I used it rather than just going with my initial plan.

If you're having trouble getting clear answers about retirement options, I'd suggest using Claimyr (https://claimyr.com) to get through to an IRS agent directly. I spent weeks trying to clarify some S-corp retirement contribution rules, leaving messages and waiting on hold forever. Claimyr got me connected to an actual IRS agent in about 20 minutes when I'd previously wasted hours on hold. The agent walked me through the exact rules for S-corps making SEP contributions and confirmed the deadlines. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c It saved me from making a costly mistake on my retirement contributions, and the peace of mind was worth it.

I was extremely skeptical about Claimyr when I first saw it mentioned here. After being disconnected by the IRS phone system countless times while trying to get clarity on my S-corp retirement contribution limits, I was desperate enough to try anything. I'm honestly shocked to report it actually worked. Within about 30 minutes, I was talking to a real IRS representative who helped clarify my specific situation with having both a SEP-IRA and transitioning to a Solo 401k. The agent confirmed that I was calculating my contribution limits correctly and provided documentation to back it up. Not having to spend hours on hold or getting disconnected made a huge difference. I was able to confidently move forward with my retirement strategy knowing I had confirmation directly from the IRS.

Something to consider: you might want to run the math on whether electing S-Corp status actually saves you money at your income level. With $215k net income and $90k salary, you're saving on self-employment tax but paying additional costs: - S-Corp filing fees ($800+ in some states) - Payroll service costs ($600-1200/year) - More complex tax preparation ($1000+ vs. Schedule C) - Administrative overhead (time/hassle) At higher income levels these costs are worth it, but there's a break-even point. I switched BACK to sole prop/Schedule C when I realized I was only saving about $500/year after all the extra S-Corp costs.

Quick tip about the SEP-IRA contribution deadline - while technically you have until your filing deadline (including extensions), many providers require some processing time. If you plan to file on March 15th without an extension, I'd recommend setting up the SEP-IRA no later than early March to ensure everything processes in time. Also, if you think your income will continue to grow, definitely set up that solo 401k for 2023 before December 31st. With your income level, the solo 401k will likely let you contribute significantly more than a SEP-IRA due to the combined employer/employee contribution structure.

Something else to think about - as an S-corp owner, consider opening a cash balance plan in addition to your solo 401k in future years. If you're looking to really maximize tax-advantaged retirement savings, this might be an option once your business shows consistent profitability. At your income level, you could potentially put away over $100k annually combined between solo 401k and cash balance plan contributions. It's more complex and requires actuarial certification, but the tax savings can be substantial for high-income business owners.