I'm looking to start a retirement account and I'm looking for options that fit with my scenario.

I'm the sole employee/owner of an S-Corp and as such, I give myself a W2 at the end of each year and pay monthly & quarterly tax deposits for both federal and state. All of the S-Corp income is 1099'd to the S-Corp.

What investment options have the best tax advantages for this scenario, assuming that I would want to lower my tax burden for the year?

1 Answer 1


I recommend an individual 401(k). The contribution limits are higher ($17,500 in 2014) than an IRA, and there are no fees to set up and maintain the account from most of the investment firms out there like Fidelity and Schwab.

Contributions are tax-deductible, and you can set up company matching as well for additional tax benefits.


  • Beware of the non-discrimination rules in case you end up hiring employees, and the income limitations. You may not be able to match as much as you would want if your corp doesn't earn enough money.
    – littleadv
    Nov 25, 2014 at 3:42
  • @littleadv so, I'm interpreting this to mean that if my corp matches my contribution, it would have to match an employees in the future too?
    – jpea
    Nov 25, 2014 at 4:05
  • @jpea precisely.
    – littleadv
    Nov 25, 2014 at 4:19
  • If/when you hire employees, you have the option of maxing out that year's contribution and match, then change your company policy and reduce/remove the matching on the day you add your first employee. So you can certainly start out with matching.
    – Rocky
    Nov 25, 2014 at 21:28

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