Freelance Developer at $150K

Income: $150,000

Tax Savings: $22,000

David, a senior software developer who contracts for multiple tech companies

David earns $150,000/year from software development contracts. At this income level, S-Corp election and maximum retirement contributions provide substantial tax savings.

Deduction Breakdown

S-Corp Salary

Reasonable salary (SE tax only on this)

$80,000

SE Tax Savings

Saved on $70K distributions (15.3%)

$10,710

Home Office

Dedicated home office space

$3,000

Equipment

Mac Studio, monitors, peripherals

$4,000

Software/SaaS

GitHub, AWS, JetBrains, etc.

$3,600

Health Insurance

Family plan through business

$9,600

Solo 401(k)

Max employee + 25% employer on salary

$43,000

Total Deductions

$153,910

Key Takeaways

•S-Corp election saves ~$10K+ in SE tax at this income
•Solo 401(k) allows $69K max contributions (if income supports)
•All development tools and SaaS are fully deductible
•Health insurance through S-Corp is tax-advantaged

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