Small business tax deffered planning.

4 Replies

I got very serious into rental property about 10 years ago. Things are really now starting to snow ball and it has got me starting to think of diversifying some into index funds and maybe some bonds to great another layer of FIRE protection. Looking to put some type of plan in place. What are other small business owners doing to also help minimize their tax liability. I am looking at using Roth IRA and start a 401k inside my company ( just have to make sure I don't hear same for all employees ). Other suggestions to maximize what I one can do to put some profits into tax deferred vehicles? Thanks.

@Matthew T.

To fund any kind of retirement plan, you need earned (active) income. Rentals generate the other kind of income, passive, which cannot be used to fund retirement plans.

So first, you will have to restructure your setup to "manufacture" active income. Usually it is done with a separate property management company. It's best to discuss it with a tax expert before embarking.

Most retirement plans require covering your employees, as well. As you expect, I will recommend talking to a retirement expert - like @Dmitriy Fomichenko or @Brian Eastman .

I also flip homes as well as built a property management and construction company.

I would be happy to offer my employees a 401k plan.

Originally posted by @Matthew T. :

I also flip homes as well as built a property management and construction company.

I would be happy to offer my employees a 401k plan.

You seemed to say in your original post that you were concerned about covering employees. Maybe a typo.

With a diverse business like yours, whatever techniques exist out there, they need to be coordinated between each other and aligned with your goals. The right approach is to consult with one of the tax strategists specializing in REI. There're several of us on this board.

Oh no. I just mean I need to make sure I do the same for all my employees across all the companies. Do you know if I could do a 401k for each company for myself? And then in a few years for the roth IRA rollover?