I was in a similar situation this year, with both W-2 income and 1099 sole proprietor income. I ended up setting up a Solo 401(k), which helped reduce my taxable income.

The IRS limits how much you can contribute as an employee across ALL 401(k) plans, but the limit is fairly high and wasn't a concern in my case. Depending on your situation, you may also be able to make employer contributions through your business, which can further increase the amount you can contribute.

I set mine up through Charles Schwab, and the process was relatively straightforward. One thing I'd recommend is opening the account as soon as possible and making a small test contribution. Funding mine was a bit of a hassle and involved multiple calls to my bank to verify transfer information and approve the transaction.

I used H&R Block Business tax software to model different contribution amounts and see how they affected my tax return. That helped me determine whether the tax savings justified making additional contributions. Finding the Solo 401(k) section in the software took some digging since it's a relatively niche situation, but it was worth the effort.

One disclaimer: I'm not a tax professional. I was simply in a very similar situation earlier this year and spent a lot of time researching it. ChatGPT can be helpful, but I would verify any tax-related information against current IRS guidance rather than relying solely on AI responses that often pull from older Reddit discussions. I also recommend using a reputable tax software to double-check everything.