Elizabeth Richardson wrote:

- quote -

I'm not saying that she doesn't want to participate in Social Security,
in fact she will still be paying FICA on earnings. I'm just exploring
options for reducing FICA.

-Will

"Will Trice" <wwtrice[at]paragondynamics.com> wrote in message
news:43934878.8060403[at]paragondynamics.com...
- quote -

I can answer only as to my husband's government pension contributions, on
which he pays FICA. Only a percentage of his mileage reimbursements are not
subject to FICA, all else gets taxed.

But, just out of curiosity, why would she not want to participate in social
security? I realize as a sole-proprietor she pays double FICA, but the
employer portion is not subject to income tax anyway.

Elizabeth Richardson

My wife is self-employed. If she sets up a defined-benefit plan, would
the contributions (sorry if that is the wrong term) to the plan be
exempt from FICA? This would make the plan more attractive than a
solo-401(k) (assuming the costs were reasonable) since 401(k)
contributions are still subject to FICA. Is a 401(k) match subject to
FICA?

For background, my wife's business is organized as an LLC and we file
Schedule C, but we could always reorganize as an S-corp or C-corp if
necessary to take advantage of retirement strategies.

Thanks for you inputs,
-Will