When you are self employed, you are responsible for paying your own taxes. What determines whether you have to pay quarterly estimated taxes is what's called the safe harbor. If you owe less than a thousand dollars when it comes time to pay taxes, then you're considered in the safe harbor and don't know any penalties. Another way you can be in the safe Harbor as a high income earner is to have paid a hundred and ten % of the taxes that were due last year. But if you are also having money withheld, then you subtract that out before you divide by four.
In this episode we answer your questions about self-employed retirement plans. If you are self-employed, open a solo/individual 401(k). If you make a lot of money, you might consider a personal defined benefit plan. Do a backdoor Roth IRA and a health savings account. Those are your retirement plans for a self-employed doc. That's the basic setup. Anything you want to save above and beyond that goes in a taxable account. So it is not that complicated. When you get into all the details though, there can be a lot more questions. We tackle those questions in this episode. See show notes here https://www.whitecoatinvestor.com/self-employed-retirement-accounts-qa-260/
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The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs for specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor channel is for you!
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