Quick question - a financial advisor told me that my wife or anyone else could be a 1% member/partner in my currently solo LLC and could be a recipient of as much profit sharing as I'd like (ie 50%), which would then allow my wife to kick in a large amount into a Solo 401k along with whatever I contribute.

2 questions:

1. Is that accurate? Does the percent 'ownership' have no bearing on profit sharing other than whatever is agreed upon? and

2. An accountant told me that because my wife is not a physician, she could not be a member on my LLC because I'm a doc and she's helping administratively but because she is not a professional she can't co-own any part of the LLC ... I'm not sure if that's true, but he feels the only way to reimburse her is via W2 or 1099 for her services, and he leans heavily towards W-2 (which minimizes her profit sharing and 401k contribution given that she would be paid a relatively small salary when looking at the big picture) ...

Zip Code: 07728

I think the safest route would be to pay your wife a salary through your LLC to allow her to max out the retirement plan contributions. This will mean that she won't need to made a part owner of the LLC. Plus, you would pay equivalent Social Security and Medicare taxes by employing your wife as she would pay if she picked up a portion of the LLC income.

You can maintain a Solo 401k if the only participants to the plan are two spouses, and no other employee works more than 1,000 hours per year for your practice.

Also, when employing a family member, remember, that you should only compensate a family member a fair wage for services provided.

Zip Code: 01801