Not sure if this is the best subreddit to ask so feel free to direct me to a different sub if appropriate.

I worked as a public employee and I had a real bad workplace accident which forced me to retire and now I collect my disability pension benefits. To supplement my pension income, I started a consulting business under a Single Member LLC.

The rules of my pension are that if I make more than what my former position’s base salary, it’s deducted from my pension benefits. For example (not real figures), if the salary of my former job was $100k/yr and my current pension is $50k, I’m only allowed to make an additional $50k. If I make more than an additional $50k, then my pension benefits will be adjusted so that I’ll only make $100k. If I earn more than $100k/yr , then I’ll forfeit all pension benefits. This restriction expires on my 50th birthday which was the pension plan’s earliest retirement age.

I didn’t anticipate making this much money and I really don’t want to “work for free” so I’ll admit it’s a good problem to have.

Can I pay myself as a W-2 employee and file my company’s taxes as an S-Corp? If I file my LLC’s taxes as an S Corp, will the LLC still show on my personal income like it did when I filed as a sole proprietor?

That way I can control my personal income and just invest the rest of the companies profits until I turn 50 which is about 15 years away.

Thanks!

  • nugnug1226@alien.topBEnglish
    1·
    11 months ago

    Somebody else mentioned making donations to a charity that you control. That is one of many “loopholes” what wealthy people take advantage of to not pay taxes. In a nutshell, you create a non-profit organization like “SpiritedEngineering Foundation” where you manage the fund. Your LLC then “donates” to that charity, which becomes a deduction and in turn minimizes your pass-through income. You then can use the funds in the foundation to pay for certain expenses like meals, traveling, cars, etc. Another loophole is to buy art or other investments from your LLC. I used to work for millionaires and they would share these tidbits with me once in a while. Obviously nothing you should do without the use of experts such as tax advisors, wealth management, tax attorneys, CPA, etc