Hi All, My father is opening his third business and has asked me to take on the accounting for it (yes, I’m qualified) as he won’t be as hands on in business #3 as he is in #1 and #2.
Since this will be a second source of income for me that I don’t need he asked me to research if there is a way to pay me tax exempt. Ie, if I open a 501-3c or something similar and get paid through that can I set the money aside for my child’s college fund (I’m not interested in setting up a 529 account)
I’m wondering if there’s a separate entity I can establish so I’m not an employee but rather a contractor to be smart with my obligations.
This is really the answer I needed above all else. Thank you so much!!
I think I can bump up my retirement contributions in my day job (we have a mega backdoor ROTH available) to offset the liability of going this way on my end and my dad will just have the higher liability on the company side unfortunately
Your dad does not have higher tax liability if you go as a contractor. he just deducts your pay as an expense. The government will get less of the money, overall, if you work as a contractor.
Your drive to the office will not be a deductible expense. I see you mentioned that elsewhere. The drive to you first work location of the day, and home after, is considered personal.