You can actually invest in real estate, promissory notes, precious metals, cryptocurrency, small businesses, and concert tickets, or raw land. Your broker may tell you that you can’t do this and it’s prohibited. They’re blatantly wrong.
This is a very important question and something we often analyze for clients in our office. In fact, many clients rush to put their spouse on payroll, but for the wrong reasons and it could actually be a costly mistake.
For example, this year (2014) your spouse could contribute up to $17,500 (or $22,500 if over 55) and your Company take a tax deduction for the W-2, while your spouse doesn’t claim any income on the W-2. The exact paycheck to the spouse, and deductible to the Company, is actually $20,178 (for a deferral of $17,500), because the company must withhold and match FICA of 7.65%, for a total of 15.3%. Nonetheless, the ultimate tax benefit is significant due to the ‘time value of money’ and the opportunity of the spouse to create and fund a 401k.