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Obamacare - Medicaid - Starting business - Risk free?
invite response
2014 Nov 21, 12:47am 3,656 views 5 comments
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joshuatrio
2014 Nov 21, 12:57am
So you would have to set your business up as a different type... ?
joshuatrio
2014 Nov 21, 1:04am
Definitely going to go talk to a CPA and Tax Attorney.
I have sufficient cash to cover myself for a few years.
I checked out covered California the other day and couldn't believe how steep the subsidies were for low income. Full coverage for virtually nothing.
Figured if I just reduced my income enough, it made sense.
joshuatrio
2014 Nov 29, 12:36am
Well, sat down with a CPA the other day - Call it Crazy was right.
Income earned is income earned as an LLC. So if I made 100k, I couldn't "pay myself" just $25k and have the business hold onto the other $75k. The guv sees my income as $100k and that's it.
However, if I incorporated as a class C corp, it's possible to do it where you only pay yourself $25k and the biz keeps the $75k - however you are subject to double taxation, which doesn't make sense financially at this time.
The CPA I met with didn't seem like the sharpest tool in the shed, so I'm going to meet with another one.
I'm wondering if (as an LLC), if I could park everything in pre-tax 401k's/IRA's and then my income is only the remainder. Therefore qualifying for medical subsidies.
I'm wondering if (as an LLC), if I could park everything in pre-tax 401k's/IRA's and then my income is only the remainder. Therefore qualifying for medical subsidies.
It depends on how much you make.
401k plans have the highest contribution limit for your purposes - $18,000 with an extra $6,000 catch-up allowed for those over 50.
SEPs have a much higher dollar limit ($53K), but are limited to the lesser of that "or 25% of income."
Does obamacare and medicaid expansion make starting a business a risk free proposition right now?
For example, with my current salary, to buy into the obamacare silver plan would set me back $700/mo.
If I started an LLC, and paid myself no more than $25kish or so a year, my whole family would qualify for medicaid (now that they no longer do an asset check test)... If I bump my income to $35k, my kids are covered under medicaid, and I'm on a medical plan for $120/mo for me and my wife (that 120/mo is the total) - with a $2200/per person max deductible, which is very reasonable.
I'm new to starting a business. But this seems to be risk free. Full coverage medical for pennies due to subsidies.
Is it legal to only pay yourself $20k, even if your LLC made $50k?
Anyhow, not trying to cheat the system, but have wanted to go into business for a while - this could make it a loss free proposition for my family. I personally know families who are multi-millionaires - parents on subsidized healthcare and kids on state plans.
If this option is available, why not use it?
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