wealthschema/archetypes/sb-02-solo-practitioner-professional-services
SB-02Small BusinessAccumulationmoderate tax complexity

Solo Practitioner (Professional Services)

Independent consultant, attorney, CPA, therapist, or architect operating as sole proprietor or single-member LLC. Irregular income, self-funded benefits, SEP-IRA.

SB-02 is the Schedule C archetype: unincorporated professional-services solopreneurs paying full IRC §1402 self-employment tax, sending quarterly estimates under §6654, and absorbing SSTB §199A phaseouts directly on the personal return.

Age Range
32–55
Net Worth
$100k–$1M
Cohort
Small Business

About this archetype

SB-02 exists because Schedule C filers create testing complexity that W-2 corpora and S-Corp corpora both miss. The full 15.3% self-employment tax under IRC §1401 applies before any income tax is calculated, the deductible-half-of-SE-tax flows above-the-line on Schedule 1, quarterly estimated payments under §6654 must clear safe-harbor thresholds (100% of prior-year tax or 110% if AGI >$150k), and the SE-health-insurance deduction under §162(l) interacts with marketplace APTC reconciliation in a way that creates circular calculations. SSTB classification (specified service trade or business under §199A(d)) hits this corpus hard — legal, accounting, health, consulting, and financial-services practitioners face the phaseout starting at the §199A(b)(2) threshold and lose the QBI deduction entirely above the upper threshold. Home-office under §280A with the simplified-method-versus-actual-expense decision, the §179 deduction with the active-trade-or-business limitation, and qualified-business-income aggregation under Treas. Reg. §1.199A-4 round out the testing surface.

The structural story is irregular income against fixed obligations. Median gross income is $183k but the dispersion is wide — billings vary month to month, retainer versus hourly mix shifts with the practice, and cash-flow planning relies on a SEP-IRA (contribution-anniversary flexible) more than a Solo 401(k) (employee-deferral deadline-driven). Median net worth approaches $1M with median liquid net worth of $308k, much of it held back specifically to cover April 15 plus four quarterly estimates. The 'I forgot a quarter' scenario is the recurring failure mode SB-02 households surface.

What separates SB-02 from SB-01 is the absence of an S-Corp election: the entire net Schedule C profit is subject to SE tax, and there is no reasonable-comp split to manage. From SB-03 it differs by being a single owner without partnership tax filing; the K-1 surface is absent. SB-02's diagnostic is the §1402 burden and the §6654 quarterly-estimate cadence — products that treat self-employed income identically to W-2 income systematically miss this archetype.

Defining characteristics

  • Sole proprietor
    Schedule C filer (or single-member LLC taxed as disregarded entity) with no S-Corp election in effect; the entire net profit is subject to IRC §1402 SE tax.
  • SEP-IRA
    SEP-IRA preferred over Solo 401(k) because the SEP allows employer-contribution decisions through the extended return due date, which fits irregular-income cash management.
  • Self-employed health insurance
    IRC §162(l) above-the-line deduction with marketplace APTC reconciliation circularity — the §162(l) deduction reduces MAGI, which can increase APTC, which reduces the §162(l) deduction in a fixed-point loop.
  • Estimated quarterly taxes
    IRC §6654 safe-harbor: 100% of prior-year liability (110% if AGI >$150k) or 90% of current year, paid quarterly on the 4/15, 6/15, 9/15, 1/15 cadence.
  • Irregular income
    Billings vary materially month-to-month; cash management is dominated by tax-reserve maintenance and the four-quarter estimated-payment schedule.
  • Home office deduction
    IRC §280A home-office deduction with simplified ($5/sq ft up to 300 sq ft) versus actual-expense election; depreciation recapture on disposition under §1250 if actual-expense method elected.

Corpus signature

n = 13 households

Aggregated across the 13 SB-02 households in the shipped v3 corpus corpus. Numbers describe the corpus, not population claims.

Median income
$183k
p25–p75 $150k–$198k
Median net worth
$931k
mean $989k
Liquid net worth
$308k
median
Investable assets
$556k
median
Income distribution
$100k–140k
1
$140k–180k
4
$180k–225k
8
Net-worth distribution
$575k–925k
6
$925k–1.3m
5
$1.3m–1.6m
2
Goals across the corpus
Retirement13 / 13
Education funding9 / 13
Debt payoff8 / 13
Home purchase4 / 13
Emergency fund1 / 13
Liability composition
Credit cards13 / 13
Mortgages9 / 13
Student loans8 / 13
Auto loans5 / 13
  • 9 of 13 (69%) are homeowners; the remainder rent.
  • CA, WI, MD account for 5 of 13 households — 38% of the corpus.
  • Median adult-member age is 46 (range 34–62 across primaries and spouses).
  • 9 of 13 (69%) carry one or more dependents.

Representative household

SB-02-seed-7
Lauren B.Married filing jointly·St. Louis, MO

Lauren and Christopher are the rare dual-solo household — both spouses on Schedule C, so the §1402 SE-tax burden hits twice, two SEP-IRAs are in play, and §6654 quarterly estimates must reconcile against a joint return. Combined gross income of $183k looks comfortable until the SE-tax-plus-marginal-rate math reduces it; debt payoff is on track because the household keeps a tax reserve, but retirement and education funding are off track because the SE-tax draw has crowded out qualified-plan contributions. The diagnostic is the dual-Schedule-C MFJ return — software that aggregates SE income across spouses incorrectly is the bug this file finds.

Combined income
$183,384
Net worth
$676,700
Liquid NW
$241,541
Ages
38 / 34
Top goals on this household
Retirement
$3,608,700
Education funding
$855,170
Debt payoff
$67,108

Schema fields covered

Every SB-02 household ships with — at minimum — these JSON fields populated. The full schema is documented in the data set you purchase.

members[].age
income.combined_gross
net_worth.total
filing_status
longitudinal.monthly[].net_cash_flow
longitudinal.monthly[].savings_rate
stress.scenarios[]
liquidity.months_of_expenses

Who builds against this archetype

Tax-software platforms use SB-02 for Schedule C preparation flows — SE-tax calculation, deductible-half flow to Schedule 1, §6654 quarterly-estimate computation with safe-harbor logic, and SSTB §199A phaseout above the §199A(b)(2) threshold. Cash-flow and bookkeeping products use it for irregular-income smoothing, tax-reserve recommendation engines, and the home-office §280A simplified-versus-actual decision. Marketplace and ACA-tax-credit products use SB-02 to test the §162(l) self-employed-health-insurance deduction interaction with APTC reconciliation, including the IRS-published iterative computation for the fixed-point loop. Compliance teams use it for 1099-NEC issuance and the reciprocal information-reporting that surrounds independent-contractor relationships.

Testing scenarios this corpus is calibrated for

  • 01Schedule C preparation with COGS, vehicle expense (standard mileage versus actual), §280A home-office deduction, and §179 versus bonus-depreciation choice.
  • 02IRC §1401 self-employment tax with the deductible-half-of-SE-tax above-the-line flow to Schedule 1.
  • 03IRC §6654 quarterly estimated-payment safe-harbor logic — 100% prior year, 110% if AGI >$150k, or 90% current year.
  • 04SSTB §199A phaseout for legal, accounting, health, financial-services, and consulting practitioners across the §199A(b)(2) threshold range.
  • 05Self-employed health insurance deduction under §162(l) with APTC reconciliation circular computation per Rev. Proc. 2014-41.
  • 06SEP-IRA versus Solo 401(k) contribution-capacity comparison, including the extended-due-date employer-contribution flexibility unique to SEP.

Edge cases and what's not in this corpus

SB-02 explicitly excludes owners who have elected S-Corp treatment — those belong in SB-01 where the W-2/distribution split and reasonable-comp surface are the diagnostic. Multi-member partnerships and PLLCs taxed as partnerships are SB-03 territory. Cannabis-industry sole proprietors hit IRC §280E (no deductions or credits except COGS for trafficking in controlled substances) and live in N-04 by design — SB-02's deduction surface assumes legal trades or businesses. Real-estate-rental Schedule E activity is separate from Schedule C and belongs in MB-03 or P-04. Creative and royalty-driven irregular income (artists, authors, musicians) overlaps the irregular-income theme but the royalty mechanics and IRC §263A uniform-capitalization rules push that population to AR-01.

Calibration notes

Income and net-worth bands during v3 synthesis were anchored to IRS SOI Schedule C filer tabulations and BLS Occupational Employment and Wages data for the targeted professional-services occupations (legal, accounting, consulting, healthcare-services-not-W-2). State concentration in CA / WI / MD reflects both genuine prevalence and a sampling choice to surface high-state-income-tax cash-flow pressure. Per CLAUDE.md §9 the corpus is FROZEN — priors above describe synthesis intent rather than auditable distribution fits. Specific §199A threshold values reflect the statute as enacted; year-specific inflation indexing is not asserted.

How this differs from related archetypes

Frequently asked questions

What does the SB-02 archetype represent?+

SB-02 — Solo Practitioner (Professional Services) represents unincorporated single-owner businesses filing Schedule C: independent consultants, attorneys, CPAs, therapists, architects, and similar service providers. The full net profit is subject to IRC §1402 self-employment tax, and the household runs on quarterly estimated payments under §6654.

What income range does the SB-02 corpus cover?+

The 13 shipped SB-02 households have a combined gross income median of $183,384 (25th–75th: $149,571–$198,355). Median net worth is $931,118 with $307,568 in liquid net worth — a significant portion held against tax-reserve obligations and the four-quarter estimated-payment schedule.

How does SB-02 differ from SB-01 (LLC / S-Corp Owner)?+

SB-02 has no S-Corp election — the entire net Schedule C profit is subject to 15.3% self-employment tax with no W-2/distribution split. SB-01 households use the S-Corp election to shield distribution income from SE tax, which creates a reasonable-comp testing surface SB-02 does not.

Does the corpus surface SSTB §199A phaseout behavior?+

Yes — the professional-services concentration means a majority of households are in SSTB territory, with the income distribution clustered to exercise the §199A(b)(2) threshold and the full phaseout range. SSTB classification is downstream of the household's industry attribute.

Are the §162(l) and APTC interactions modeled?+

The household data supports the §162(l) self-employed-health-insurance deduction and APTC reconciliation circular computation per Rev. Proc. 2014-41 as a downstream tax-software test. The corpus does not pre-bake a specific iteration outcome — the iteration is the test.

Is the SB-02 corpus regenerable?+

No. The shipped v3 corpus is frozen and not regenerable from current code (drift confirmed 2026-05-09). Improvements land in a future v4 release with per-archetype golden fixtures in CI.

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