CASE STUDIES

 

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TAX

Tax - Investment - Estate & Trust
Planning - Audit

My objective is to create tangible financial benefits for my clients. I have found many ways to do this over the years. In the following paragraphs I have provided some representative examples.

Tax Planning Executive

My client was chief executive of a small public company. He was leaving and in the process of negotiating his severance package as well as canceling some debt and selling his company stock. I advised him how to negotiate a settlement that would be to his advantage from an income tax perspective resulting in well over $100,000 of tax savings.

Year End Tax Planning Executive

My client is an executive who had changed jobs and as a result had received a substantial amount of income from her former employer in the form of payouts of deferred compensation, vesting of restricted stock grants, and exercise of stock options. Via planning around the Alternative Minimum Tax, I was able to create over $30,000 in tax savings.

Tax Planning Self-Employed Consultant

My client was an executive in his early sixties whose job was eliminated due to the acquisition of his company. I prepared a retirement projection for him and showed him that with some changes in his investments he would be able to retire comfortably with taking very little investment risk. He wanted to continue working, however, so he started consulting. He lined up consulting work that earned him several hundred thousand dollars a year. I recommended that he set up a defined benefit pension plan whereby he could defer approximately half of his consulting income. This created tax deferral and likely tax savings since he will probably be in a lower tax bracket when he takes the money out of the plan.

Tax Planning Self-Employed Professional Practitioner

I do not have the exact projected benefit in the above situation, but I recently put together a similar plan for another client a professional working part-time expecting to earn approximately $175,000 per year. In order to motivate the client to implement my plan, I illustrated that the projected long-term benefit from this strategy should be well in excess of $1,000,000.

Tax Planning Individual with Moderate Income

Not all my clients are executives or self-employed professionals earning substantial incomes. While the possible tax savings are not as large for clients of moderate incomes, relatively speaking they can be quite substantial. For example, a client came to me from another local firm. By taking the time to get to know her situation I found out that several years prior she had inherited a small house in Florida. I suggested that she rent out the house and explained how she could convert her expenses (the cost of traveling to Florida, for example) to tax deductions thus shielding the rental income from tax and creating tax losses that could be used to offset other income. The result is over the past three years she has earned gross rental income of approximately $6,600 while generating over $10,000 in tax losses that saved her approximately $3,500 in taxes.