I am younger than 59 years old. I used to run a sole proprietor business, generated earned income, filed a Schedule C, and maxed out on sole 401(k) contributions, and I also contribute to an HSA account.
However that business has faded out almost completely.
Currently my main activity is managing my own investments: stocks, bonds, rental real estate, and membership in an LLC that invests in commercial real estate. In reality, this is all passive income
I am married, file jointly but spouse currently does not work, and we have two minor children.
According to IRS rules
, can I set up some sort of entity - LP, LLC, S-Corp, trust - that would allow me to pay myself a reasonable management fee that I could declare on a Schedule C through which to continue paying FICA taxes
and continue to make sole 401(k) or other retirement account contributions?
Or, no matter how I slice it, is it all considered passive income as per IRS rules?