Just so that I understand this.
We will most likely claim the following deductions for 2018 and use the following tax deferment strategies
$12k for me and 12k for her - standard deductions
2k for our son -standard child deduction
$6900 for our HSA
18400 for my 401k
12k for her new solo 401k - That is the amount she is ok with putting in without going crazy on her portion of the bills/expenses. I want her to pay more but maybe next year.
5500 for her tax deductible portion of her payroll taxes * see below
For her, and again, I am a complete newbie on this, her self employment tax (IE 15.3% for medicare and SS) is based off her (gross income) minus (the self employment adjustment below) minus her (schedule C form OR safe harbor amount of $1500 (whichever is greater)), which is completely separate from and is ok to use with us taking the standard deduction?
Honestly now that I typed out the above line and looked at the graph below, maybe a better question is what is the 'Adjusted earnings' and how do you calculate that. I am confusing myself I think...
Also, she may be keeping her old 401k. We are getting conflicting information on how old 401k's work. Vanguard said they cant take her old 401k and roll if over to her new solo-401k.
Summary Table
Self-Employment Tax Analysis
Social Security
Medicare
'Adjusted' earnings
$78,000
$78,000
Less: self-employment adjustment
$5,967
$5,967
Taxable self-employment earnings
$72,033
$72,033
Self-employment tax
$8,932
$2,089
Total self-employment tax
$11,021
Tax-deductible portion
$5,511