Single member LLC - What's the best retirement plan for high income self-employed musician?

Thanks for the detailed response! For the Solo 401k, do I need to set that up before the end of the calendar year or can I do it when I file taxes? Also, does a high income like that phase me out of any benefits?

You need to establish your Solo 401(k) plan by December 31st of the tax year to make employee contributions for that year. However, you have until your tax filing deadline (including extensions) to make the employer contributions. Income level doesn't phase you out of a traditional Solo 401(k), which is one of its advantages. However, if you're interested in Roth contributions within your Solo 401(k), there are income limits to consider. With your income level, you may want to consult with a financial advisor about backdoor Roth strategies if tax-free growth is appealing to you.

Does it analyze if I should switch from sole prop to s-corp too? I've heard that can save on SE taxes but wasn't sure if it affects retirement options.

I'm skeptical about these online tools. How accurate is it compared to just talking to a CPA? Was there any catch or did they try to sell you financial products afterward?

It absolutely analyzes whether an S-Corp election would benefit you based on your income level. It shows you the potential self-employment tax savings alongside how it would affect your retirement plan options. For musicians with higher incomes like yours, it often recommends the S-Corp route with an optimal salary/distribution split. There's no catch or product sales pitch. I was skeptical too, but it's purely an analysis tool. While a CPA gives personalized advice, this gave me the numbers and scenarios immediately so I could make an informed decision. I still discussed the results with my accountant, but I was much more prepared for that conversation.

How does that even work? Seems sketchy that some service can magically get you through to the IRS when regular people can't get through.

Yeah right. The IRS never picks up no matter what. Not buying that this actually helps. I've been trying to get answers about my LLC retirement options for months and it's impossible to talk to anyone.

It works by using their system that continuously redials and navigates the IRS phone tree until it gets through. When an agent answers, their system calls you and connects you directly to that agent. It's not magic, just automation that spares you the hours of waiting on hold. The IRS does answer eventually, the problem is most people can't stay on hold for 3+ hours during business hours. Their service just handles that part for you. Nothing sketchy about it - they're just solving the hold time problem and they don't have access to any of your tax information or participate in the actual call with the IRS agent.

I've heard of Cash Balance plans but don't know much about them. What kind of contribution amounts are we talking about and what's the setup/maintenance cost compared to a Solo 401k?

With your income level, you could potentially contribute $100,000-$200,000+ annually to a Cash Balance plan, depending on your age and other factors. The older you are, the higher the allowable contribution. The downside is definitely the cost and complexity. You'll need an actuary to set it up and perform annual certifications, which typically runs $2,000-$3,000 per year, plus initial setup fees. There are also more complex testing requirements and mandatory contributions. It makes the most sense if you: 1) consistently earn high income, 2) want to contribute much more than the Solo 401(k) limits, and 3) plan to maintain the plan for at least 5+ years.

Can you still do a backdoor Roth if you have an existing SEP IRA? I tried to do this last year and my accountant said something about the pro-rata rule making it inefficient.

You're absolutely right about the pro-rata rule. If you have any traditional IRA balances (including SEP IRAs, SIMPLE IRAs, etc.), the backdoor Roth conversion gets complicated because the IRS treats all your traditional IRAs as one big pot when calculating the taxable portion of the conversion. One potential workaround is rolling your existing SEP IRA into a Solo 401(k) if your plan allows it (most do). This removes the traditional IRA balance and clears the way for clean backdoor Roth conversions. Just make sure to do this before December 31st of the year you want to do the backdoor Roth to avoid the pro-rata calculation.