I've heard a lot about hiring your spouse to work in your practice and reap the benefits of additional tax-deferred savings with their salary.

If my wife is a self-employed writer/editor with PR background, could my practice pay her as an independent contractor to do PR and website editing for us? Must she be a W2 employee? She does all of her work from her home office and would never actually come to the practice. As an independent contractor, she would be able to defer almost all of her pay from my practice in her individual 401k as she doesn't make enough from her other clients now to max it out.

Zip Code: 02492

That's a great idea. Assuming your spouse works with other clients as an independent writer/editor, then there is no reason that your practice couldn't contract with her has well. The practice would need to compensate her fairly for the services she provides - similar to what her other clients pay her to provide similar services.

Any money she earns as a contractor could then be used to max out a Solo 401k, or some other self-employed retirement account.

(Warning - Shameless plug ahead.) While you're thinking about this topic, check out this article that was written for one of the AMA journals about hiring family members: http://www.ama-assn.org/amednews/2011/02/21/bica0221.htm. There are some great quotes from various sources in this article.

Zip Code: 01801