Ryan Odom

💰 Helping Solo Business Owners and High W-2 Earners Plan/Save on Taxes ⭐️ Ex-Financial Advisor 👨‍🎓 Free Course with 12 Tax Saving Strategies⬇

[Ryan Odom @ryanmarkodom]

To anybody with a full-time W-2 and a side hustle:

You can open a solo 401(k) for your side hustle and make up to $72K in contributions/mega backdoor Roth contributions for 2026

On top of whatever you put into your company W-2 401(k) plan

Employee contributions are the only aggregate max between the two plans

Example:

Let's say I make $200K as a W-2 and contribute the full $24.5K as an employee to my company plan. Then my company matches 3%, so on $200K of wages, they put in another $6K. Total contributions = $30,500. Now let's say I also have a side hustle that makes $80K net. I could, if I wanted, open a solo 401(k) plan for this side hustle and put a full $72,000 into this plan through employer and mega backdoor Roth contributions. All mega backdoor Roth contributions grow tax-free, and the employer contribution is maxed at 20% * $80,000 minus 1/2 self-employment tax for a deduction on 2026 taxes

Such a good option as we approach a 12/31 deadline

[Ryan Odom @ryanmarkodom]

CASE STUDY POST: Senior territory sales director. Married. 2 kids. Lives in California. Makes $1m/year in 1099 income paid to his LLC taxed as an S corp.

He's got great foundational stuff in place with his CPA but things still feel reactive and feel like strategic moves are being missed. He's right. We did a quick call and here's what I was able to point out in a short 20-minute intro call:

1.) $100K salary from his LLC. Great that his LLC is taxed as an S corp but the salary is too low. 1.) Good luck defending it in an audit. 2.) It's causing him to pay too much in tax. His current QBI deduction = roughly $50K, when it should be closer to $150K. A $100K missed deduction at a 37% federal tax rate is a $37,000 overpayment in tax. Every. Single. Year. Yes it increases his payroll tax but the net net benefit is still $25K+/year and it allows him to get more deductions with retirement contributions which I mention below

2.) SEP IRA. Every time I see a SEP IRA I know somebody is missing good tax strategy. With his $100K salary he's only been able to do a $25K deductible employer contribution. With his new salary closer to $300K, he could do a full $72K contribution to a SEP IRA but even this would be wrong. Much better to do $24,500 as an employee pre-tax deferral and then $47,500 as an employer contribution to a solo 401K. This gets him a higher QBI deduction mentioned above. Plus he can roll his existing SEP IRA to the new solo 401(k) so that he can do a backdoor Roth at $7,500/year moving forward.

3.) Backdoor Roth for his wife even though she isn't working, spousal contribution

4.) Wages for the kids and custodial Roths. Pay them up to $16.1K/year for real and legit work at a fair rate. Every $1 paid to a kiddo spreads income from his 37% federal and 12.3% state tax rate to their 0% tax rate. It also allows them to contribute up to $7,500 a year to custodial Roth IRAs for tax-free growth. Those funds can then be used for college planning, downpayment on a house, starting a business, etc. - anything that him and his wife would like to do to help their kids get ahead

5.) Some adjustments to his asset location. REITs and bonds in his regular brokerage account are getting taxed at over 40% per year. Not very efficient. These can be moved to ideally pre-tax retirement accounts, then put aggressive investments in tax-free Roth accounts, then ETFs and index funds and such in his regular taxable brokerage account

Then we can have a deeper discussion on other stuff like a cash balance plan, adding his wife to payroll and then adding her as a participant in his solo 401(k) plan so that she can do up to $72K/year in tax-advantaged contributions or 100% of her wages, etc. Direct indexing would also be a great win for him since they have a large taxable brokerage account with large unrealized gains that he'd owe 30.1% tax on for every dollar of gains. Very very important that we are meeting now before a 12/31 deadline on a lot of this

[Ryan Odom @ryanmarkodom]

@mntruell 👏

[Ryan Odom @ryanmarkodom]

@sigmahamster2 @ArynneWexler 😂

[Ryan Odom @ryanmarkodom]

@niccruzpatane @Tesla Tesla road trips >

[Ryan Odom @ryanmarkodom]

@maladham COOKING.

[Ryan Odom @ryanmarkodom]

@TSLAinvesta @SawyerMerritt @Starlink More of an elated confirmation

[Ryan Odom @ryanmarkodom]

@SawyerMerritt @Starlink BANG. Been my problem with it for so long

[Ryan Odom @ryanmarkodom]

@amyforsandiego Wild

[Ryan Odom @ryanmarkodom]

@JakeLatimer26 Yeah. Income is above that for now though

[Ryan Odom @ryanmarkodom]

My plan to pay $0 in lifetime capital gains tax

I already have a taxable brokerage account that I've been funding over the last 10ish years

My "problem" is that any time I sell a position in this account I owe 15% federal long term cap gains tax, 9.3% state, and 3.8% NII tax. 28.1%. Every $100K of capital gains = $28,100 tax bill

So here's what I've been doing to reduce/completely offset this tax for future planning:

1 - Started a direct index strategy. I've talked about this way too much already but for great reason and it's been a great addition to my personal planning. I no longer invest in index funds in my taxable brokerage account. All weekly investments go to direct indexing now and have gone here for the last year or so. This still tracks my chosen index (S&P500) for .09%. Yes there can be tracking error but not nearly enough of a concern for me to not use this strategy. All I do is automate this and let losses accrue over time and watch my investment go up (hopefully).

2 - The losses that build over time with direct indexing allow me to sell portions of my taxable brokerage account without paying a capital gains tax. I choose tax lots with minimal gains for now to free up more cash quicker. Proceeds then get used to fund more direct indexing but where it gets even more fun is using proceeds to fund my solo 401(k). $70K last year and $72K this year. There can be separate debate on Roth vs. pre-tax here but let's say I do all mega backdoor Roth here - those contributions grow tax-free forever since they are in a tax-free Roth account and I maintain liquidity since principal contributions for this can be taken out tax-free and penalty-free anytime. Example: $142K of contributions grows to $242K. The $100K of gains is tax-free and the $142K can be withdrawn any time and for any reason. Now imagine the savings over 10, 15, 20, 25, 30 years God willing

^^ If I wanted to take step 2 further I can add my wife to payroll and assign her a reasonable salary of $72K for marketing work in my company (she already helps with all of this - emails, posting, DM outreach, etc). This could shelter another $72K in 2026 and more over time as the limits increase

Then the flywheel builds and builds.

Then to avoid making this all one big tax deferral I can die with the investment and my heirs get a step-up in basis on the account. I can try to hit the 0% capital gains tax bracket in early retirement or retirement. I can borrow against the funds and live off of those proceeds (then when I die the loan is paid back before the rest goes to my estate).

All fun to think about and we'll see how it adjusts with goals, values, etc but the clear problem this solves for me is not paying 28.1% on every $1 of capital gains I have

[Ryan Odom @ryanmarkodom]

@Polymarket Can’t afford it

[Ryan Odom @ryanmarkodom]

@Stormi4Life Hi Pat, appreciate the follow. $72,000 is the max for all 401(k) plans in 2026

[Ryan Odom @ryanmarkodom]

To anybody with a full-time W-2 and a side hustle:

You can open a solo 401(k) for your side hustle and make up to $72K in contributions/mega backdoor Roth contributions for 2026

On top of whatever you put into your company W-2 401(k) plan

Employee contributions are the only aggregate max between the two plans

Example:

Let's say I make $200K as a W-2 and contribute the full $24.5K as an employee to my company plan. Then my company matches 3%, so on $200K of wages, they put in another $6K. Total contributions = $30,500. Now let's say I also have a side hustle that makes $80K net. I could, if I wanted, open a solo 401(k) plan for this side hustle and put a full $72,000 into this plan through employer and mega backdoor Roth contributions. All mega backdoor Roth contributions grow tax-free, and the employer contribution is maxed at 20% * $80,000 minus 1/2 self-employment tax for a deduction on 2026 taxes

Such a good option as we approach a 12/31 deadline

[Ryan Odom @ryanmarkodom]

@niccruzpatane Plus $99/month FSD for Model Y tho

[Ryan Odom @ryanmarkodom]

@grok verify please

[Ryan Odom @ryanmarkodom]

A fun tax angle on this

I have a reservation to get the now-discontinued Cybertruck AWD for $59,990

Let's say I resell for $79,990 in less than a year

I'd have a $20K short-term capital gain and would owe 32% federal and 9.3% state tax and 3.8% NII tax on this

Aka $9,020 in tax

With a direct indexing strategy to harvest losses that gets $30K of losses in 2027, I owe $0 in tax

@grok verify in the comments for me please

[Nic Cruz Patane @niccruzpatane]

If you want to know how already insane the Cybertruck market is now that production will end in the middle of 2027, here you go.

This $59,990 (at one point) Cybertruck AWD is now being resold at an Audi dealer for close to $91,000.

[Ryan Odom @ryanmarkodom]

@JoshyClark84 Yes. Up to $72K

[Ryan Odom @ryanmarkodom]

@sytelus @grok Looks true to me

[Ryan Odom @ryanmarkodom]

@dwsobest ?

Ask "Does the plan support after-tax contributions and in-servide distribution of after-tax contributions to a Roth IRA or Roth 401k for the mega backdoor Roth strategy"

Not hard

I use and suggest https://t.co/SfaGbAlDSX

[Ryan Odom @ryanmarkodom]

@TrumpDailyPosts He should be the nominee