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Twice a month, get clear, smart tips to help you keep more money, build wealth, and make taxes easier for 1099 CRNAs.
Hey there, CRNAs. Welcome back to Money Moves for CRNAs. If you're a 1099 nurse anesthetist and want to hold on to more of the money you earn, you're in the right place. This podcast comes to you twice a month, always short, simple, and designed to make your money work smarter. And just a quick note, this podcast is for educational purposes only.
Bill White:For personalized advice, talk with a qualified tax or financial advisor. In our last episode, we broke down the One Big Beautiful Bill Act from lower tax brackets and bigger deductions to better child credits and even more charitable write offs. All great news for CRNAs looking for extra breathing room. Today, we're kicking off part one of a two part series on how CRNAs can use an S Corp to turn taxes into opportunity. We'll show you why timing and strategy matters so much when it comes to taxes and how smart planning now can give you more freedom, flexibility and financial control down the road.
Bill White:Now here's your host Randy Larkin, CPA from Atlanta Tax Planner.
Randy Larkin:Hi. Welcome back. Let me ask you something. When you hear the word taxes, what comes to mind? Stress?
Randy Larkin:Headaches? Maybe a big fat check to the IRS. Well, what if I told you taxes don't always have to be painful with the right plan? You can actually use taxes to your advantage. Yep.
Randy Larkin:Instead of just handing money to uncle Sam, you can turn taxes into opportunities. Today, we're talking about how CRNAs, especially those working as 1099 through an S Corp, can use smart tax plays to build wealth and even retire tax free. We'll cover three big strategies. One, delay taxes during your big $350,000 earning years by loading up your solo 401-K. Two, convert to Roth IRAs when you slow down and your income drops to, let's say, 180,000 and grab the senior deduction if you qualify.
Randy Larkin:Three, use recessions to lock in tax free growth at a discount. Sound good? Let's dive in. Play one. Delay taxes in your big years.
Randy Larkin:Picture this. You're working full time, pulling in $350,000 through your s corp. Great income. But the IRS is standing there with a fork and a knife. Here's your play.
Randy Larkin:Max out your solo 401-K with traditional contributions. Since you're both the employee and the employer, you can save on both sides. As the employee, you can put in up to $23,000 in 2025 or 30,500 if you're 50 plus. As the employer, your S Corp can add up to 25% of your W-2 wages. Together, that's as much as $69,000 a year or $76,500 if you're age 50 or older.
Randy Larkin:And the best part, it goes in before taxes. So if you earn $350,000 and stash 60,000 in your solo 401-K, the IRS only taxes you on 290,000. You can save thousands of dollars in just one year. With an S Corp, you also get to split your pay between W-2 wages and distributions, which helps cut self employment tax. The trick is balancing your W-2 high enough to maximize your 401-K, but not so high that you drown in payroll taxes.
Randy Larkin:That's why having a CPA who understands CRNAs is a game changer. So during those high income years, your best move is clear. Load up your solo 401-K. Delay those taxes now while you're in the top brackets. Play two.
Randy Larkin:Convert when it's cheap. Fast forward a few years. You're tired of all the shifts and scale back. Maybe you're making a $180,000 part time instead of 350,000. Still great money, but now your tax bracket is much lower.
Randy Larkin:This is when you flip the switch. Instead of putting more into traditional accounts, you start doing Roth conversions. Here's how it works. You move money from your traditional solo 401-K into a Roth IRA. You'll pay taxes on the amount you move, but since you're in a lower bracket, those taxes cost you less.
Randy Larkin:It's like buying gas when it's $3 a gallon instead of $5. And here's the bonus. If you're 65 or older, the government gives you a senior deduction. That's an extra $6,000 if you're single or $12,000 if you're married, on top of your standard deduction. So imagine this.
Randy Larkin:You're 66 years old, making a $180,000 part time. You take the standard deduction plus the senior bonus. That lowers your taxable income by over $28,000 if married. That leaves plenty of room to convert another 30,000 to 40,000 from traditional to Roth without jumping into a higher tax bracket. But here's the catch.
Randy Larkin:The senior deduction only lasts from 2025 through 2028. After that, it's gone. So if you're in your mid sixties during those years, this is your golden window. Use it or lose
Bill White:And there you have it. The first two plays in your CRNA tax strategy playbook. You've seen how smarter timing and planning can help you keep more of what you earn and start building real wealth with purpose. But we're not done yet. In part two, we'll dive into one more powerful move, a strategy that can supercharge your tax free growth and help you make the most of market changes.
Bill White:Trust me, you won't want to miss it. If you found this helpful, be sure to follow or subscribe so you never miss future episodes packed with smart tax strategies and financial insights. And don't forget to share it with a fellow CRNA who could use a little tax clarity too. Until next time, work smart, save more, and take control of your money. Music licensed from premiumbeat.com under license number 7394047.