Turned Research & Development Expenses into $30,000 in Federal Tax Credits
We recommended a manufacturing client consider a research credit study to determine if federal credits could be taken on their tax return. Based on findings of the study, the company spent quite a bit on research and development activities and resulted in a $30,000 federal tax credit.
Set Up an IC-DISC for Foreign Sales Resulting in Initial $32,000 Tax Savings
We assisted a client with setting up an IC-DISC (C Corporation) because of their substantial sales to foreign customers. The manufacturing company (S Corporation) calculates a commission based on foreign sales and pays it to the IC-DISC. This provided the S Corporation a deduction from ordinary income. The IC-DISC turned around and paid a dividend to the S Corporation for the same amount, and the IC-Disc pays no tax. The S Corporation reports dividend income taxed at 23.8% versus ordinary income taxed at 39.6%. For this client, that was a tax savings $32,000 in the first year.
Identified a Tax Savings Scenario by Grouping Interrelated Businesses
Identified a tax savings scenario by electing to group interrelated businesses we enabled our client to treat otherwise passive income as non-passive for purposes of the 3.8% net investment income tax. By doing so, we were able to reduce the taxpayers’ current year tax liability by nearly $16,000.
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Lowered Client’s Tax Bracket Through IRA Strategy
Working alongside the client to analyze their personal tax scenario, we advised the client to split their IRA withdrawals over a 2 year period. This kept them in lower tax brackets for both years and resulted in an overall tax savings of $2,300.
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Performed Tax Savings Analysis on Solar Panels
In less than 24 hours, we were able to provide a tax savings analysis for our client who was installing solar panels. The analysis illustrated how the 1st year after-tax cash outlay would be less than 0.7% of the initial solar panel investment.
Created trust to fund charitable contributions, protect estate
After inheriting a significant amount of money, our client turned to us to help set up a charitable trust. Through the trust, we helped our client make annual charitable donations while removing a significant amount of money from her taxable estate. The trust was funded with low-basis stock, and each year our client sells a portion of these shares to obtain the cash needed for donations. Any capital gains are offset by the trust’s charitable deduction.
Fueled Roth conversion with proactive tax planning
We turned two years of significant business losses into many years of tax savings. Our client was able to convert $400,000 in a traditional IRA to a Roth without paying any tax. The family has already seen substantial tax-free growth in the new account.
Turned passive losses into tax gain
Our client sold a rental property for a very small gain. We helped him uncover the suspended passive losses that became deductible upon disposition. Further, we advised this client to convert $100,000 of a traditional IRA to a Roth. Thanks to the deductible rental losses, no tax was due on the conversion.
Found the tax upside in a down year
We worked with a client to turn a bad year for his business into a benefit for his personal tax returns. This included advice on carrying net operating losses back or forward to offset other income, converting an IRA to a Roth IRA for future tax-free withdrawals, and recognizing additional capital gains. Our goal was to make the best use of the loss while taking into account the client’s cash flow and future goals.
Helped retiring executive exercise stock options.
Our client, an executive about to retire, needed advice developing a strategy to exercise ISO and NQ options. We helped our client understand the benefits and drawbacks of taking stock options after retirement. We weighed factors like changing tax laws, cash flow concerns and the current tax environment.
Guided clients through tax implications of divorce
We helped our clients and their divorce attorneys through the division of assets, including significant stock options, to minimize the tax impact. We created an option exercise strategy and analyzed the tax basis and AMT basis on which shares of stock would provide the most benefit to each party.
Handled estate planning for terminally ill spouse
Our team worked closely with our client’s attorney and investment advisors to create an estate plan for a terminally ill spouse. This included determining the tax implications of trusts set up for children, investment decisions and equalization of the estate.
Used Roth IRA conversion to reduce taxes
In 2010, 2011 and 2012, we advised our clients to use Roth IRA conversions to use the current-year losses and resulting lower tax brackets. In addition, the Roth conversions helped our clients avoid creating Net Operating Loss situations.
Evaluated long-term care options
We worked closely with a client to assemble a long-term care plan for a family member. We analyzed the costs of various arrangements (including long-term care facility, assisted living, and independent living with around-the-clock staff). We evaluated the care implications and financial sustainability of each choice, helping our client make an informed decision.
Helped client buy second home out of state
One of our clients wanted to buy a second home. We worked across state lines to find a mortgage company to finance the purchase, and served as the liaison between our client, the realtor and the bank. We even signed the papers in our office.
Used QPRTs to reduce estate taxes
We worked with a family to set up a Qualified Personal Residence Trust (QPRT) for their primary residence and a second home, transferring the property to their children without any estate tax. This removed a combined $1.5 million and any future appreciation from their estate. They remained in the house beyond the term of the trust, paying rent to the children and further reducing the overall value of the estate.
Used Missouri tax credit purchase to save thousands
We have implemented an annual program to purchase Missouri tax credits, saving our clients tens of thousands of dollars each year on both their individual and business taxes.
Turned net operating loss into tax refund
Our contractor client had net losses for the tax year. We used these losses to offset all of their income from the prior tax year. This resulted in an immediate tax refund of $75,000 which they were able to apply to their current cash flow.
Saved client $1,500 in personal property tax dispute with St. Louis City
Our client received a notice from the City of St. Louis disputing the valuation of the company’s construction equipment. We responded promptly on their behalf, dealing with the city’s revenue department to resolve the discrepancy. Our client won the dispute, saving $1,500 in annual personal property taxes.
Organized asset schedules to save thousands in taxes
When our client came to us, their fixed asset schedules were in total disarray. We developed a process to determine which assets to capitalize and which to expense. We also cleaned up their personal property declarations, removing tens of thousands of dollars of equipment the company didn’t own anymore. We saved them thousands in personal property taxes over several years.
Uncovered 179d energy tax credit savings
When an architecture client began designing government-owned buildings, we helped them discover they qualified for 179d tax deductions. Over the past three years, we have helped shelter over $400,000 of income.
Saved $240,000 through cost segregation
Our client purchased commercial buildings for $6.5 million. Through a cost segregation study, we uncovered a net present value savings of $240,000.
Used cost segregation to increase cash flow
Our client was considering purchasing an office building at a cost of $19 million. We suggested a cost segregation study, which generated an $800,000 net present value of after-tax benefits. Cost segregation analyzes buildings and identifies components that can be depreciated over 5, 7 or 15 years rather than the standard 39-year period. This reduction allowed our client to defer income taxes and increase cash flow.
Deferred taxes through multi-property exchanges
We helped a private real estate investor execute multiple 1031 exchanges. Like-Kind exchanges allow for the transfer of ‘like-kinds’ of investment property between taxpayers on a tax deferred basis. By using a combination of different strategies, we were able to defer $365,000 in taxes for this investor over a five-year period.
Structured equipment purchase for tax credits
Our work with a local manufacturer told us they were in a distressed area. When they wanted to make a $1 million equipment purchase, we helped them maximize their state tax credit, worth about $75,000. Three years later, they turned to us for assistance with a similar purchase.