$17,000 a year back, without changing the business

A client we will call Francisco is a real estate broker who came to us at 36. His returns were filed correctly every year and he had no idea he was overpaying, because nothing on a compliance return tells you what a plan would have saved. Like most brokers, his income arrived as commissions, his entity had been set up once and never revisited, and no one had modeled his compensation, his retirement capacity or his deductions against each other.

We ran his last three years through a strategy lens: how his entity was taxed, how he was paid out of it, what retirement contributions his income supported, and which ordinary business expenses had been left on the table. The plan required no change to his income, no cut to his expenses, no growth in the business and no change to his lifestyle. It only required implementing the strategies he already qualified for.

Roughly $17,000 a year in tax saved, the first year and every year going forward, about $1,400 a month. The larger number is what that money does if it is invested instead of sent to the IRS: $17,000 a year from 36 to 67 at a 12% average return compounds to about $5 million, of which only $500,000 is contributions. Illustrative, and dependent on returns he cannot control, but the tax saving itself is not.