Victoria

Litigation Partner · New York, NY · Age 44

SingleIncome: $602KLegal

“I advise clients on risk but had no idea about my own K-1.”

The Situation

$602K K-1 income from law firm partnership

NYC resident (top marginal: 37% fed + 10.9% state + 3.88% city)

Charitable giving of $40K/year in cash

1. Solo 401(k) on K-1 Income

IRC §401(k)

$22,100

K-1 income qualifies for Solo 401(k). Shelter $69K as both employer and employee.

2. DAF Bunching (Appreciated Stock)

IRC §170(e)

$18,600

Bunch 3 years of $40K giving ($120K) into a DAF. Donate appreciated shares, not cash.

3. NY PTE Election

NY PTE

$12,400

Elect pass-through entity treatment. Bypass $40K SALT cap on K-1 income.

4. QBI Deduction Optimization

IRC §199A

$5,360

Law firm K-1 income may qualify for QBI if structured correctly. 20% of qualified income.

Before

$305,000

→

After

$246,540

Annual Savings

$58,460

19% reduction

Open Solo 401(k) before Dec 31 and max employer + employee contributions

Transfer $120K in appreciated stock to Vanguard Charitable DAF

Coordinate with firm managing partner on NY PTE election

Discuss QBI eligibility with CPA (specified service trade limitation)

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