Three real engagements.
Specific numbers.
See if yours is next.
Every case below is drawn from an actual engagement — anonymized, but accurate in structure and outcome. Read the numbers and do the math on your own situation. If you recognize yourself in any of these, the opportunity is probably there.
The LLC Owner Nobody Advised
Consultant. $220,000 net profit. Schedule C. No S-corp. No retirement plan. Six years in. Never had a tax planning conversation.
The Situation
Six years of profitable consulting. Six years of Schedule C. Six years of paying self-employment tax on every dollar of net income — 15.3% on the first $160,200, 2.9% on the rest. No S-corp election. No retirement account in the business. Every business expense paid personally, no accountable plan. The CPA filed accurately. Nobody planned.
What We Found
- S-corp election was clearly warranted at their income level. With a reasonable salary of $80,000 and distributions of $140,000, self-employment tax dropped from the full $220K base to the salary portion only.
- A Solo 401(k) allowed them to shelter $23,000 in employee contributions plus a 25% employer contribution on their salary — eliminating tax on $46,000 of income in the first year.
- Home office, vehicle, phone, and equipment expenses totaling approximately $28,000 per year were being paid personally. An accountable plan converted these to tax-free reimbursements.
The Outcome
S-corp elected and structured. Salary set at $90,000; $130,000 distributed. SE tax eliminated on the distribution: $13,600 annually, recurring. Solo 401(k) established; $61,000 contributed in year one, reducing taxable income by that amount. Accountable plan documented: $18,400 in home office, vehicle, and equipment expenses reimbursed tax-free. Total year-one tax reduction: approximately $36,000. Annual recurring benefit from SE tax elimination alone: $13,600 every year going forward.
The High-Income W-2 Who Stopped at the 401(k)
Physician. $380,000 W-2. Employer 401(k) maxed. Side consulting income. No entity structure. No HSA. No Roth strategy. Assumed there was nothing left to do.
The Situation
High W-2 earners often conclude the conversation ends at the 401(k). This physician — $380,000 from their employer, $95,000 from a side consulting practice run as a sole proprietorship — had maxed their employer plan and stopped. No backdoor Roth. No HSA. No entity structure on the consulting income. No defined benefit analysis. The accountant filed. Nobody looked at what else was available.
What We Found
- Backdoor Roth IRA contribution for both client and spouse: $14,000 in after-tax contributions growing permanently tax-free.
- HSA contribution via high-deductible health plan: $7,300 in pre-tax contributions, investable, with triple tax advantage.
- Side consulting practice restructured as an S-corp. At $95,000 in consulting income, the entity structure reduced self-employment tax by $9,800 annually.
- Defined benefit plan analysis initiated — at their income level, contributions exceeding $100,000 per year are achievable with full deductibility.
The Outcome
Backdoor Roth IRA contributions for client and spouse: $14,000 in after-tax contributions per year, growing permanently tax-free. HSA established via qualifying health plan: $7,300 in pre-tax annual contributions with triple tax advantage — deductible going in, grows tax-free, tax-free on qualified withdrawal. Side consulting practice restructured as an S-corp: at $95,000 in consulting income, SE tax reduced by $9,800 annually. Defined benefit plan analysis initiated: at their age and income, annual contributions exceeding $120,000 are achievable and fully deductible. Year-one tax reduction: $22,500. Recurring annual benefit from entity restructuring: $9,800 every year going forward.
The Real Estate Investor With Unused Leverage
Business owner. Four rental properties, one commercial. $290,000 W-2. CPA filed annually. Cost segregation never mentioned. Passive losses sitting unused.
The Situation
Four residential rental properties and one commercial building. All depreciated on straight-line schedules — 27.5 years residential, 39 years commercial. High W-2 income from a separate employer. Passive losses from the properties accumulating but not offsetting anything because the taxpayer did not qualify as a real estate professional. The CPA filed accurately. Nobody raised cost segregation, nobody analyzed real estate professional status, nobody looked at short-term rental strategy.
What We Found
- A cost segregation study on two commercial-use properties identified $180,000 in components eligible for accelerated depreciation — generating immediate paper losses.
- Client's spouse met the material participation threshold for real estate professional status, converting passive losses to active — making them offsettable against W-2 and S-corp income.
- Bonus depreciation rules allowed the accelerated deductions to be taken entirely in the year of the study, eliminating $54,000 in federal tax liability for that year.
The Outcome
Cost segregation study commissioned on the commercial property. Result: $186,000 in first-year accelerated depreciation by reclassifying components into 5, 7, and 15-year schedules under bonus depreciation. Federal tax deferred at marginal rate: approximately $62,000 in year one. Short-term rental strategy implemented on one residential property: under the short-term rental rules, losses became non-passive and offset W-2 income directly — $34,000 in previously suspended passive losses unlocked and applied. Total year-one tax impact: approximately $96,000 in combined deductions and unlocked losses. The commercial property cost segregation: a one-time study that generated first-year savings exceeding its cost by a factor of eight.
All scenarios above are anonymized composites drawn from real client work. Specific numbers are illustrative and vary based on income level, entity structure, filing status, and applicable law. Past outcomes do not guarantee future results. This page does not constitute tax advice. Consult a qualified tax professional regarding your specific situation.