Software Business / S-Corp with 5 Employees

CASE: Sunil

  • 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.

Sunils Tax Liability before implementing Designer DB Plus®

  • Net Profit after Expenses and deductions$865,000
  • Married Filing jointly tax Liability at 37%$320,050
  • Creditor Protected Retirement Savings$0.00
  • Tax Free Medical Reimbursement in Retirement$0.00

GOAL: Sunil wants to pay lower taxes to ensure he has enough retirement savings to maintain his lifestyle and be prepared for the high cost of medical and health care in retirement.

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.

  • Net Profit after Expenses:$865,000
  • Plan Contribution$535,040
  • Qualified Business Income:$329,960
  • Pass-through Deduction:($65,922)
  • Taxable Income:$263,968

  • Tax & Deferred Savings First Year

    $256,698*

  • Creditor Protected Retirement Savings:

    $502,937

  • Tax Free Medical Reimbursement in Retirement

    $125,734

*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.