I have a question which relates to prior posts of yours, specifically, eligibility for the Section 199A deduction. Is a ‘statutory employee’ (i.e. Insurance Agent) precluded from claiming this deduction? The proposed reg’s make reference to an individual being ;’deemed’ an employee if the individual is an employee under common law and statutory rules for determining the employer-employee relationship. Under these circumstances, the individual would be precluded from taking the deduction. I’m uncertain whether this pertains to a ‘statutory employee or not. Your thoughts would be most appreciated.

Thanks~

John

Regarding my criticism of the Bogleheads plan — a plan I want to say again that I followed — my point was most folks just don’t save enough or start early enough to make it work. I think the statistics bear this out. Though I would be delighted to see this reality change.

Regarding the possibility that same failure may apply to starting a business, I don’t know if it does. Though I don’t have data to back up my thinking. But a couple of things work differently for small business ownership. First, starting the business really is more immediate. You’re not doing stuff today in hopes of a better tomorrow three or four decades from now. So I think that might help. Second, illiquid assets like private equity may make it easier to stay the course. (The same thing is true, I’ve anecdotally observed, for real estate investors.)

Regarding the capital requirement, I think the post reports that a pretty large percentage of folks can start a business with no financial capital. But on average people who need capital need quite a bit. An amount that’s roughly equivalent to one to two years of college. So very significant, I agree.

To repeat a theme I’ve tried to promote in all these posts, small business ownership isn’t for everybody. (Neither is medical school… or law school… or a skilled trade like becoming an electrician). But the choice works better than some folks realize.