A client operated a successful HVAC business for many years. The business generated approximately $300,000 in cash flow and was in a C Corporation. Like many C Corporations we come across, the prior “strategy” was to pay the profit out in W-2 wages to avoid double taxation, while overpaying FICA.
The client wanted a five to seven year exit strategy and is extremely conservative and wanted fixed/guaranteed options for any retirement balances. Based on the client’s preferences, cash flow needs, and budget, we designed their custom tax plan:
Combined Federal & State taxes were reduced from $116,000 per year to $83,026 in 2016, $45,626 in 2017, and $11,027 in 2018. In only three years, the client’s net worth increased by over $200,000. With zero investment risk, the client has a guaranteed lifetime retirement income benefit in excess of what they previously thought was unreachable. The client is in a position after only three years to retire comfortably, compared to their desired goal of five to seven years that was unreachable under their previous plan, and the client has been taking the opportunity to travel the world with family now that there is a clear path forward.