Tax Reduction & Elimination

Our Approach

What exactly do we mean by tax reduction and elimination? It entails transforming an existing tax liability or current tax structure through strategic adjustments and reallocations, all aimed at creating a tailor-made retirement strategy designed for executives. This comprehensive strategy not only incorporates bonuses, but also extends to double bonuses, presenting you with a diverse range of 4-5 alternatives as you approach the culmination of your business journey. These options are meticulously crafted to ensure you can fully savor the rewards of your labor.

Our Tools for Tax Reduction

Captive Insurance

A captive insurance company is a property and casualty insurance company established to provide coverage primarily to a parent operating company. Captives are an effective risk management strategy to insure against risks for which commercial insurance is not available or may be too expensive.

Section 162 Executive Bonus Plan

U.S. Code § 162 introduces the executive bonus plan, a mutually beneficial setup. The company deducts the bonus annually, while the employee gains extra advantages. Employers choose executives and benefits with easy payroll-based administration and the flexibility for company-initiated termination.

Supplemental Retirement Strategy

We utilize an effective strategy that helps provide a way for your business to supplement the retirement benefits of your key executives. Strategy benefits can be tailored for each executive, with no consistency requirements and no minimum vesting rules. Strategy benefits are also tax-deductible to the business when they are paid.

Buy-Sell Agreement

Comprehensive buy-sell agreements are designed to protect the company against the 8-10 major events that could cause the company to dramatically change or completely cease operation. Examples of a few events include Louisiana divorce, disinterest, and terminal illness.

Non-Qualified Deferred Compensation

Non-qualified deferred compensation is an arrangement established by employers to provide retirement income and often death and/or disability benefits to selected managerial or highly compensated employees. When properly arranged, the employer can defer income taxation of the deferred amounts until the benefits are paid.

Defined Benefits

A defined benefit strategy can be an extremely effective tool in securing key people to help you grow your business or practice over the long term. What many financial strategists miss is the opportunity to create a truly customized strategy that includes not only insurance products, but other meaningful and tangible contributions to the employee that they care more about.

Split-Dollar Arrangement

Split-dollar arrangements are a cost- and tax-effective way to provide life insurance benefits for select employees. The employer pays all policy premiums, and the death benefit is split between the employer and the employee’s beneficiary.

Section 79 Group Insurance

U.S. Code § 79 states that a business may provide group insurance (term or permanent), take an income tax deduction of premiums paid (which may have a significant effect on corporate and personal tax liability) and have employees receive favorable taxation on the coverage. No government approval is required; minimum record-keeping and tax-deduct premiums are annually contributed.

Carve-Outs

One of the greatest frustrations for business owners is that in most retirement planning platforms, there isn’t a large enough carve-out. Most plans require the owners to involve all employees and then use a percentage to determine their own contribution. The highest of those percentages generally works out to between $100k and $125k. Business owners implementing our concepts can carve out up to $1 million per owner into their retirement strategies.

Our Tax Reduction Process

1. Make Your Submission
   The last three years of business and personal tax filings will be required, as well as year-to-date financials and one year of corporate banking statements.
2. Attend Your Meeting
   This is a scheduled meeting with your assigned tax specialist to review our findings and reveal your reduction and elimination opportunities.
3. Strategy Implementation
   Our clients’ favorite part of the process is witnessing money that was previously removed from the business become part of their executive retirement strategies or business cashflow.