CASE
Chad, age 53, is married. He is a successful real estate agent with no employees. Chad has a net profit of $500,000 (after paying self-employment tax).
GOAL
Chad wants to retain more of his earnings, pay lower taxes, secure his retirement savings, and prepare for the high cost of health and medical care in retirement.
SOLUTION
Designer DB Plus™ Defined Benefit Combo Plan
DEDUCTION
As an owner of a pass-through entity, he may qualify for a tax deduction under (Section 199A) of up to 20% of his Qualified Business Income if his income is below the $340,100 threshold for married couples.
*Please consult your tax advisor; RAS does not provide tax advice.
Designer DB Plus™ Plan |
|
| Net Profit after Expenses: | $500,000 |
| Plan Contribution | $262,000 |
| Qualified Business Income: | $238,000 |
| Pass-through Deduction: | $47,600 |
| Taxable Income: | $190,400 |
|
Results: $262,000 Retirement Savings $129,304 Tax Savings* |
|
* Tax savings compared to no Plan and (Section 199A) QBI deduction. Assumes estimated 37% tax rates. RAS does not provide tax advice. This example is based on specific assumptions and is used for illustrative purposes only. |
|
Small Business Owner Opens Designer DB Plus™
CASE
Sunil is 43 years old, married, and the owner of a thriving Software Engineering firm. Sunil has five employees, and they file as an S Corporation. As a result, he nets approximately $ 865,000 after expenses.
GOAL
Sunil wants to pay lower taxes, ensure he has enough retirement savings to maintain his lifestyle, and be prepared for the high cost of medical and health care in retirement.
SOLUTION
Designer DB Plus™ Defined Benefit Combo Plan.
DEDUCTION
As an owner of a pass-through entity, it is crucial to reduce the Net Operating Income to qualify for the Qualified Business Income Deduction (Section 199A) for up to an additional 20% of his Qualified Business Income
*Please consult your tax advisor; RAS does not provide Tax advice.
Designer DB Plus™ Plan |
|
| Net Profit after Expenses: | $865,000 |
| Plan Contribution | $535,040 |
| Qualified Business Income: | $329,960 |
| QBI Pass-through Deduction: | -$65,992 |
| Taxable Income: | $263,968 |
|
Results: Percentage to Owner 94% $502,937 Retirement Savings $256,698 Tax Savings* |
|
* Tax savings compared to no Plan and (Section 199A) QBI deduction. The case assumes an estimated 37% tax rate. RAS does not provide tax advice. This example is based on specific assumptions and is used for illustrative purposes only. |
|
Endodontist Practice with 10 Employees opens Designer DB Plus™
CASE
Dr. Smiley is 49 years old, married, and the owner of a thriving Endodontist practice with ten employees. They file as a Professional Corporation. He nets approximately $1.5m after expenses.
GOAL
Reduce his personal taxes, accelerate his retirement savings to maintain his lifestyle, create tax-free post-retirement savings for health & medical care high costs in retirement.
SOLUTION
Designer DB Plus™ Defined Benefit Combo Plan
DEDUCTION
This Profession may not qualify for Qualified Business Income Deduction (Section 199A) additional 20% of his Qualified Business Income.
*Please consult your tax advisor; RAS does not provide Tax advice.
Designer DB Plus™ Plan |
|
| Net Profit after Expenses: | $1,470,000 |
| Plan Contribution | $1,162,952 |
| Qualified Business Income: | $307,048 |
| QBI Pass-through Deduction: | 0 |
| Taxable Income: | $307,048 |
|
Results: Percentage to Owner 98% $1,139,693 Retirement Savings $470,208 Tax Savings* |
|
* Tax savings, compared to no Plan, assumes an estimated 37% tax rate. RAS does not provide tax advice. This example is based on specific assumptions and is used for illustrative purposes only. |
|
Construction Company with 30 Employees opens Designer DB Plus ™
CASE
Bill is 61 years old, married, and owns a construction company with thirty employees. They file as an S Corp. He nets approximately $797,000 after expenses.
GOAL
Bill wants to save on taxes, provide employee benefits while controlling costs, and ensure he has enough retirement savings to maintain his lifestyle while simultaneously creating tax-free money for the high cost of Health and Medical expenses in retirement.
SOLUTION
Designer DB Plus™ Defined Benefit Combo plan
DEDUCTION
This Profession may not qualify for Qualified Business Income Deduction (Section 199A) additional 20% of his Qualified Business Income.
*Please consult your tax advisor; RAS does not provide Tax advice.
Designer DB Plus™ Plan |
|
| Net Profit after Expenses: | $797,471 |
| Plan Contribution | $561,627 |
| Qualified Business Income: | $235,844 |
| QBI Pass-through Deduction: | -$47,169 |
| Taxable Income: | $188,675 |
|
Results: Percentage to Owner 94% $526,137 Retirement Savings $249,782 Tax Savings* |
|
* Tax savings, compared to no Plan, assumes an estimated 37% tax rate. RAS does not provide tax advice. This example is based on specific assumptions and is used for illustrative purposes only. |
|