SEP-IRA doing 1099 work on the side of a W2 employee job
"The limit on SEP IRA is 25%, not 20%.  If you're self-employed (filing on Schedule C), then it's taken on net earning, which in your example would be 25% of $90,000. (https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people) JoeTaxpayer is correct as regards the 401(k) limits.  The elective deferrals are per person - That's a cap in sum across multiple plans and across both traditional and Roth if you have those.  In general, it's actually across other retirement plan types too - See below. If you're self-employed and set-up a 401(k) for your own business, the elective deferral is still aggregated with any other 401(k) plans in which you participate that year, but you can still make the employer contribution on your own plan. This IRS page is current a pretty good one on this topic:  https://www.irs.gov/retirement-plans/one-participant-401k-plans Key quotes that are relevant: The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both: •Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit:  ◦$18,000 in 2015 and 2016, or $24,000 in 2015 and 2016 if age 50 or over; plus •Employer nonelective contributions up to:  ◦25% of compensation as defined by the plan, or ◦for self-employed individuals, see discussion below It continues with this example: The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $18,000 in 2015 and 2016. Although a plan's terms may place lower limits on contributions, the total amount allowed under the tax law doesn’t depend on how many plans you belong to or who sponsors those plans. EXAMPLE Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2015. He deferred $18,000 in regular elective deferrals plus $6,000 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2015 were $36,500. This is the maximum that can be contributed to the plan for Ben for 2015. A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan. He must consider the limit for all elective deferrals he makes during a year. Notice in the example that Ben contributed more that than his elective limit in total (his was $24,000 in the example because he was old enough for the $6,000 catch-up in addition to the $18,000 that applies to everyone else).  He did this by declaring an employer contribution of $12,500, which was limited by his compensation but not by any of his elective contributions. Beyond the 401(k), keep in mind that elective contributions are capped across different types of retirement plans as well, so if you have a SEP IRA and a solo 401(k), your total contributions across those plans are also capped.  That's also mentioned in the example. Now to the extent that you're considering different types of plans, that's a whole question in itself - One that might be worth consulting a dedicated tax advisor.  A few things to consider (not extensive list): As for payroll / self-employment tax: Looks like you will end up paying Medicare, including the new ""Additional Medicare"" tax that came with the ACA, but not SS: If you have wages, as well as self-employment   earnings, the tax on your wages is paid first.   But this rule only applies if your total earnings   are more than $118,500. For example, if you   will have $30,000 in wages and $40,000 in selfemployment   income in 2016, you will pay the   appropriate Social Security taxes on both your   wages and business earnings. In 2016, however,   if your wages are $78,000, and you have $40,700   in net earnings from a business, you don’t pay   dual Social Security taxes on earnings more   than $118,500. Your employer will withhold   7.65 percent in Social Security and Medicare   taxes on your $78,000 in earnings. You must   pay 15.3 percent in Social Security and Medicare   taxes on your first $40,500 in self-employment   earnings and 2.9 percent in Medicare tax on the   remaining $200 in net earnings. https://www.ssa.gov/pubs/EN-05-10022.pdf Other good IRS resources:"
"Which is the ""shouldn't ever expect to do better than their competitors employees"". The ""sit down and shut up"" is towards the bottom  &gt;Second, everyone needs to understand that it’s management’s job to identify and weigh alternatives, and to recommend a course of action.  In the world as it is, management is getting lots of help – from the Board, the Court, and the Creditors. Since the decisions being made are very important, and will impact every employee, their opinions should be given careful consideration. There are many forums – including participation in the court process — in which employee views can and should be taken into account.  Management should listen carefully, but employees need to understand that it’s management’s job to decide and that acting in ways intended to undercut management’s role can only be counter-productive.  &gt;While the decision process is underway, everyone at American should be doing everything possible to improve performance, so that the post-bankruptcy company – whether American as it is or American combined with other entities – will have the broadest possible base of customer support from which to launch the renaissance every employee should be hoping for.  His entire spiel is so heavily sided towards management it's almost farcical. He's doing exactly what the airline pilot was complaining AA management is doing (treating the workers like faceless, interchangeable, and disposable cogs in the assembly line) while saying they shouldn't try to flex any negotiating power that management doesn't see fit to give them. And god forbid they have the gall to question the wisdom of their benevolent leaders (management is the thinkers, workers should just be the mindless doers).  I'm not a ""rah rah unions"" or ""boo business/management"" type of person. I just hate blatant bullshit. AA's workers have a legitimate gripe, that AA the company would almost certainly be better off merging with another airline but AA's management is better off going it alone and is asking the rest of the company to sacrifice to make that happen. Until that fundamental disconnect is reconciled, patronizing paeans to the wisdom of the company's leadership and knowing your place aren't helpful." You can't get a loan from an IRA. You cannot get a loan from your 401(k) plan with your previous employer; 401(k) plans do not give loans to ex-employees, only current employees. Thus, if you want to have the flexibility of getting a loan from the money in the 401(k) plan with your ex-employer, your only option is to roll it over into the 401(k) plan of your current employer. But be aware of the negatives in doing so, some of which are discussed in the answers to Why would you not want to rollover a previous employer's 401(k) when changing jobs?. The roofing situation is clear.  H2B visas distort the roofing labor market by reducing prevailing wages with lower-paid immigrant labor.  This allows companies to offer products at unnaturally reduced prices.  It would be unrealistic to try and run a business with local US-born labor, that's higher priced.  If your competitors can hire low-priced foreigners, you need to do it too (unless you can somehow find locals at the same price/quality/productivity).  If the H2B labor supply was cut off, then it's likely that no roofing companies could find labor for $17/hr.  They'd have to raise wages, take fewer jobs, or go out of business.  This would raise prices.    Customers wouldn't be happy, but they'd pay the price because they need roof work done.  All vendors prices would go up equally.  This process may take time.  There's a shortage.  Prices go up.  Wages go up.  Jobs become more desirable.  More workers get trained in the field, increasing the supply of labor.  This occurs until the labor supply is back in balance.  On a side note, this particular business owner sounds like they need better marketing.  If prospects want low priced work, they're going to get low-quality results.  If she wants to sell a premium roofing product, she needs to differentiate it from everyone else.  No customer spends more money just to support someone else's employees.  If she can only get penny-pinching customers, she needs to do penny-pinching work. You can ask the client to pay you through the LLC. In that case you should invoice them from the LLC and have them pay the invoice. If they pay you personally, you can always make a capital contribution to the LLC and use that money to buy equipment. The tax implications for a single person LLC providing professional services are the same for you either way: income is income whether it's from your LLC or an employer. It's different for the employer if they are giving you a W2 vs a 1099. So it doesn't matter much for you. If the LLC is buying equipment, make sure you get enough revenue through the LLC to at least offset those expenses. I'm a freelance programmer, reverse-engineer, and network engineer. I do quarterly 1099 filings using a cheap local accounting firm. I did them on my own at first; not that hard.. You deduct from sum the percentage for that earning-tier issued by the IRS.. $500.00 for writing algorithms on a timer? Yikes.. I did topcoder once but it didn't pay much then it was only good for portfolio.. No way I would race to do algorithms for third-world-rate capital.. Since you worked as an RA, the university should send you a W2 form. The taxable wages line in that form would be the sum of both the direct salary and employer paid benefits that are taxable. As such you should not need to do anything than enter the numbers that they provide you. "The decision whether this test is or is not met seems to be highly dependent on the specific situation of the employer and the employee.  I think that you won't find a lot of general references meeting your needs. There is such a thing as a ""private ruling letter,"" where individuals provide specific information about their situation and request the IRS to rule in advance on how the situation falls with respect to the tax law.  I don't know a lot about that process or what you need to do to qualify to get a private ruling.  I do know that anonymized versions of at least some of the rulings are published.  You might look for such rulings that are close to your situation. I did a quick search and found two that are somewhat related: As regards your situation, my (non-expert) understanding is that you will not pass in this case unless either (a) the employer specifies that you must live on the West Coast or you'll be fired, (b) the employer would refuse to provide space for you if you moved to Boston (or another company location), or (c) you can show that you could not possibly do your job out of Boston.  For (c), that might mean, for example, you need to make visits to client locations in SF on short-notice to meet business requirements.  If you are only physically needed in SF occasionally and with ""reasonable"" notice, I don't think you could make it under (c), although if the employer doesn't want to pay travel costs, then you might still make it under (a) in this case." "I don't think there's a rule -- (I can't comment) but Brick cited IRS rules...but IMO Brick missed one thing -- @ashur668 is not looking for a distribution, but is looking for a rollover. My best guess:  that this part of the ruleset is not well defined, and your (and my) employer have chosen to interpret any withdrawl as a ""distribution"", even if better characterized a rollover. A few months ago, I went so far as to explore if I could use a loophole -- my company had just gone through a merger; I was hoping I could rollover some or maybe all of my 401k to my IRA (I remember now, it would have been everything before starting roth 401k contributions).  My company asserted this was not permitted, and further asserted that the rumors I had heard were mistaken that when we went through a company spin-off a few years before, that nobody under 59 1/2 was permitted to roll over. I did a quick search and found IRS topic 413  As far as I can tell, this topic is silent on the matter at hand. Topic 413 referred me to IRS Publication 575, where I started looking at the section on rollovers.  I read some of it then got bored. Note that we're one step removed -- we are reading IRS publications and interpretations of IRS rules.  I don't know that anybody here has read the actual tax law.  There may be something in there that prevents companies from rolling over before 59 1/2 that is not well codified in IRS publications."