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We consulted with a client in late 2014 and we implemented a tax savings plan beginning in 2015. The client had left their W-2 job, and transitioned to a consulting role and was self-employed, and the spouse had other significant W-2 income. The client quickly began generating about $300,000 annually in consistent income in the new venture, had no employees, all expenses were reimbursed, generating approximately $115,000 in annual tax liabilities.

Retirement contributions were already maxed out, itemized deductions, college benefits were being limited, and every year the client had an increasing amount due at tax return filing, and felt like they could never catch up with the increasing burden.


Fortunately, they called one of our partners at Cash Balance Advisors!

The Plan

The client was particularly in favor of tax deferral, and being in the markets with a more aggressive investment strategy. Based on the client’s preferences, cash flow needs, and budget, we designed their custom tax plan with:

  • a focused retirement strategy contributing approximately $250,000 annually into retirement,

  • optimized the corporate structure to reduce the rates and provide an opportunity for enhanced reimbursements and deductions for previously non-deductible items,

  • shifted income to college age children to pay for college tax free,

  • implemented an insurance strategy through the business to make the payments tax-deductible

The Results

Combined Federal & State taxes were reduced from approximately $160,000 per year to:

2014 – $92,826

2015 – $28,824

2016 – $680

2017 – $26,427

Over a four-year period, the strategies reduced taxes by $491,243. These savings created additional funds to be re-invested in the client’s equity-based savings plan, generating an additional six figures in investment capital gains from money that would have been paid to the IRS!

This client is on target to increase net worth by $1 million dollars, in five years, just by implementing a tax reduction plan for the business.

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