A few years ago, my accountant recommended I begin filing as an S-Corp and open a Solo 401(k). I didn't really know what that was, so she explained...
Basically, my business revenues had reached a point where it made sense for me to file my taxes as an S-Corp instead of an LLC (more than $150,000 per year). This didn't require any structural changes; it's literally just a box on the same tax forms to elect to file as an S-Corp (even though my business was an LLC). But, by doing so, I actually saved on taxes and was able to put more of my earnings into a retirement account (that Solo 401(k) she was talking about).
Around that same time, I saw a Tweet from Ankur Nagpal (the former founder of Teachable) about starting a new company to provide Solo 401(k)s. In his view, they were the most tax-advantaged retirement accounts in America, allowing tax deductions of up to $70,000 per year. And while there are some strict eligibility criteria, I met them!
It turns out, most creators meet the criteria for opening a Solo 401(k). Not only that, but if your spouse works in the business (like mine), we can both have Solo 401(k)s, effectively doubling our potential tax deduction.
There were a few hoops to jump through. This strategy required me to start receiving a W-2 salary from the company. We set up Gusto, and I now run payroll twice per month.
I'll be honest—I still don't understand all of this tax stuff. That's why I employ a great CPA (shoutout Kristine) to help me set this stuff up.
But the result is that my wife and I both have meaningful retirement accounts that grow month over month. Every month that the business doesn't implode is another big contribution towards our future.
This is the boring-but-important stuff I don't see anyone talking about in the creator space. When you're employed full-time, you probably have a retirement plan through your employer—creators like us should have that too!
I've been using Carry (Ankur's company) for three years now—and it's been a game-changer for my peace of mind knowing that this little internet business isn't just supporting me today, but it's setting my family up for retirement too.
Because I was such a happy Carry customer, I became an investor in and affiliate for Carry too. So I receive compensation for any referral I make to Carry (as well as my own personal interest in the company's success). But I only promote and invest in companies I use personally and truly believe in.
Financial education is important, and I just don't see it in the creator space. So I just published a new video talking with Ankur about it. He'll help you understand:
If you are eligible
The benefits of a Solo 401(k)
The timelines you need to know
That last part is important—if you want to implement this tax strategy for your own 2025 tax filing, you need to open an account and make your contribution election before December 31.
That sounds intense, but it's very doable. You can contribute less than your initial election (just not more). So if you're worried you can't get a perfect figure from your CPA before the deadline, keep that nuance in mind. As Ankur says in our conversation, it's better to overestimate than underestimate your election.
You can watch or listen to my full conversation with Ankur below. He also shared a free guide to help you pay less in taxes (regardless of whether you use a Solo 401(k) or not).
I'm grateful for figuring this out when I did. But this is not financial advice! You should speak with your own accountant and/or financial advisor to determine whether you are eligible and whether this makes sense for you.
WATCH NOW ▶️
How Creators And Solopreneurs Can LEGALLY Pay Less Taxes
In 2020, Ankur Nagpal sold his course platform, Teachable, for around $250 million. But he knew that the sale would come with a giant tax bill. So Ankur became obsessed with the tax code, and he wanted to make it easier for everyone to legally operate within it.
That led him to discover Solo 401(k)s, which he calls the most powerful tax account in America. So he built a new company called Carry that helps you legally keep more of what you earn and invest it the way you want.
