Construction Company / S Corp with 10 Employees
Construction Company / S Corp
- Bill is 61 years old, married, and owns a construction company with thirty employees.
- They file as S Corp.
- He nets approximately $797,000 after expenses.
Bill’s Tax Liability without implementing Designer DB Plus® Plan
- Net Profit after Expenses and deductions$797,000
- Married Filing jointly tax Liability at 37%$294,890
- Creditor Protected Retirement Savings$0.00
- Tax Free Medical Reimbursement in Retirement$0.00
GOAL: Bill wants to save on taxes. provide employee benefits while controlling costs, and ensuring 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.
With implementing Plan
- Net Profit after Expenses:$797,471
- Plan Contribution$561,627
- Qualified Business Income:$235,844
- Pass-through Deduction:($47,169)
- Taxable Income:$188,675
Tax & Deferred Savings First Year
$249,782*
Creditor Protected Retirement Savings:
$526,137
Tax Free Medical Reimbursement in Retirement
$157,841
ADDITIONAL DEDUCTION: As an owner of a pass-through entity, this client qualified for the 20% QBI tax deduction under the (Section 199A) threshold for married couples.
Note: his income was above the threshold before plan implementation, disqualifying him from the additional tax deduction.
*Please consult your tax advisor; RAS does not provide tax advice but will collaborate with your tax advisor.
* 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.