I hear you but prepayment only helps for one year and puts you in the same spot next year or you forecast a bad next year. But I think next year will be even better than this year for us.

We would have to offer SEP IRA or 401k to all employees which we don’t want to do as this is too expensive. I don’t think we can exclude all employees from such plan if we participate in it.

Yes, except lavish business parties as I want to keep my money not spend it without return.

I can only reinvest so much. Beyond that it’s a waste of money.

How does that strategy lower your tax burden? The interest you earn your own money. It kind of doesn’t matter if you call it profit or interest. You still would be taxed on it.

I’m also not with the crowd “buy a G-wagon. You can write it off”. 🤪 Spending has to make sense otherwise what’s the point.

That’s what I thought to but that is not the case per my accountant. You pay taxes on profits regardless if they are staying in the company or not. But on the other side you can carry forward losses.

Trying not to but here we are.

I learned in this sub that you can pay quarterly to make it less painfully and adjust the amount as you go.

As I wrote we pay ourselves W2 income which brings us in the 24% bracket. The $100k are on top of that (net income after wages are paid) which brings us in the 32% bracket. So the effective tax rate is 30% on the $100k

You have to check what the pension plan actually says. You say ‘if I make more than my former position’s salary’. What does that mean? W2 income or your tax return (AGI)? I highly doubt that they mean the AGI as this includes a spouses income and any other income such as business income and capital gains.

With that said the only thing you have to do is to pay yourself $50k in W2 income and that’s it. The rest is profit in your LLC and gets reported on form 1040 schedule C. This is not W2 income, it’s profit from a business.

Then your worry is to reduce tax liability. You can do it as others said with contributions to retirement vehicles, paying yourself health insurance, long term insurance, contribute to a HSA, invest in your business to grow. If all is said and done you can see if the gray zone is for you. Buy an expensive car, buy an office real estate, lots of meals with clients, educational trips,… but be careful the saved taxes are not worth prison time.

Or create a second LLC and pay yourself another $50k in W2 income so none of your ‘jobs’ make more than your previous salary. They only come together on your tax return as separate W2.

BTW, how would your previous employer know how much you make? Do you have to provide a W2 at the end of the year or how does that work? Maybe you should provide the exact wording and then we can help you better.