TAX PLANNING CASE STUDY

Fact Pattern

  • Robert is an owner of a creative design studio located in New York City. The company is organized as S corporation
    and has a few employees located in NYC.
  • He is married to Rebecca who owns part of the business as well
  • Robert and Rebecca purchased a house in NJ and became full-year residents of NJ last year
  • Robert called us to see if anything could be done to reduce business and personal tax liability

What We Did

  • We started the call by asking several diagnostic questions about Robert’s and Rebecca’s business and personal tax
    setup. The questions were asked to identify what strategies were already in place and what Robert and Rebecca
    were not utilizing.
  • We walked through business deductions, legal structure of the business, retirement strategies, loopholes and niche
    specific strategies.
  • By the end of the call, I was able to project that they over-paid $16,780 in taxes last year and were on track to overpay the same this year.
  • Obviously, Robert and Rebecca decided to work with us and reduce their tax liability for this year while they still
    could.
  • We requested detailed information and began working our magic. As a result, tax savings went up to $20,856!

How did we do that?

  • We established a home office in NJ and with that we reduced NYC corporate tax
  • We were able to increase business deductions for commuting costs from their NJ home office to NYC office
  • We reduced gross payroll amounts paid to Robert and Rebecca and with that payroll tax went down. We
    also found ways to pay Robert and Rebecca that would not trigger payroll taxes.
  • Through careful planning, we were able to deduct some personal travel expenses as business expenses
  • We started a retirement plan that favored Robert and Rebecca over other employees in the business

 

If you would like to see how much you can save in tax dollars schedule your Free 45-Minutes Tax Strategy Session Today!

 

This case study is based on real client scenario but with slight alterations to protect the identity and privacy of the individuals. You should not make any tax or investment decisions on the basis of the information in this case study without taking
advice from a suitably qualified and authorized adviser.

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