CPAs Have a Problem
Unfortunately, most CPAs that work with Small Business Owners have a problem; they do not have the time, resources, or expertise to advise their clients on retirement plans beyond SEP, IRA, and 401k. There is too much involved and requires years of education and a dedicated team to assess a client’s situation, design the proper plan, run plan calculations, perform employee testing, bookkeeping, reports, file with IRS etc. So, they stick to what they know, SEP, IRA, and 401k recommendations.

Solving this problem is where the opportunity lies!

Partnering with CPAs
Partnering with the right CPA is the key to having a consistent referral stream of high-income clients. If you have tried this before without success, it is probably for the following reason.

Think about it from the CPAs point of view. You and every other advisor come into their office and say hi; I am a fantastic advisor, and the company and products I sell are the best! He has repeatedly heard this same thing from every advisor since the day he opened his practice. By taking this approach, you have asked him to risk his relationship with his client so that you can get paid. Good luck with that!

To create a successful relationship, you must have something of value for the CPA and their clients. Something that sets you apart from everyone else. By providing them solutions and your team of specialists in this underserved area of tax reduction and retirement planning, they can retain their best clients and get new clients from referrals. If they are securities and insurance licensed or are willing to get licensed, then you will have a revenue-sharing relationship, and that’s where a partnership with repeating referrals begins.

By taking this approach, you become the GoTo advisor. Why? Because you are bringing them tax planning solutions, resources, and a professional team that they need and don’t have.

Defined Benefit Presentation for CPAs

You’ve identified one or more CPAs who may have clients who are good candidates. Then, use our Designer DB Plus™ Proactive Tax Reduction & Retirement Strategy presentation to present to CPAs.  Click here to request a marketing presentation

With this presentation, you can:

  • Introduce CPAs to the Designer DB Plus™ (Proactive Tax Reduction and Retirement Strategy)
  • Showcase examples and potential tax savings
  • Show CPAs how to Identify ideal clients
  • Gain referrals for your advisory practice
  • Brand this presentation with your information and set a time to meet with CPAs.

Contact us for more information on how to successfully partner with CPA’s

Designer DB Plus™ and Defined Benefit plans is a powerful tool for High Income and Self-Employed Business Owners

Secure Act of 2020 Congress realized that America has a retirement planning crisis. So, to incentivize Software Engineer opens Designer DB Plus™ to offer retirement plans, they raised the tax credit limit from $1500 to $16,500. This dollar-for-dollar tax credit makes most plans a zero setup cost for the employer.

CalSavers Retirement Savings Trust Act. It requires California businesses with five or more California-based employees (one of whom is at least 18 years old) to offer either an employer-sponsored retirement plan or the state-sponsored retirement plan to their workers.

California implemented a new mandatory law requiring all companies with more than five employees to offer a retirement plan to their workers by June 30, 2022. Companies that don’t will be required to enroll in CalSavers, the state-sponsored individual retirement account (IRA), or face fines.

Although California was the first state to pass legislation related to mandatory retirement plans, it’s not the only state to do so. Similar laws exist or are being implemented in several places, including in CO, CT, IL, MD, MA, ME, NJ, NY, and OR. In addition, many other states are actively exploring a state-sponsored retirement option.

The Tax Cuts and Jobs Act (TCJA) changed the tax law that affects high-income Software Engineer opens Designer DB Plus™ and self-employed individuals.

The TCJA changes increased the value of high contribution retirement plans like Designer DB Plus™. Taking these large tax deductions of the top line, you may bring your small business and self-employed clients below the taxable income thresholds ($340,100 married taxpayer, $170,050 single taxpayer in 2022). In addition, they may qualify for the 20% QBI (Qualified Business Income) deduction and save them tens of thousands of dollars in tax liability.

CLIENT CASES

Sole Prop Opens Designer DB Plus™

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.