I work for a government psychiatric clinic about 50-60 hours a week. However, I also do medical transcription on the side, though this brings in only $1,000-2,000 extra per year. I do this through a company in Utah, and am an independent contractor. As an independent contractor, what retirement plan options are open to me? Would this conflict with the 457 plan offered through my government job? And does the little annual salary made matter, such that I could still contribute the maximum amount to that retirement plan, even if it is far above the salary from my government job?

Zip Code: 23227

Assuming your maxing out your salary deferrals through work, then the only practical option is to contribute to a SEP IRA. With a SEP, you can contribute up to 20% of your net self-employment income into an IRA account. The money contributed reduces your taxable income and grows tax deferred.

Is it worth it to contribute to a SEP if you only have a thousand or two of self-employment income? That's up to you.

I think I would first do what I could to take expenses against that self-employment income to bring the profit from this activity to zero.

I hope this helps you out.

Zip Code: 01801