Background:                                                                                                                                                                                                                           Download Tax Summary
A pediatrician and spouse with W-2 income of $250,000 and rental properties generating an additional $25,000 of taxable income each year were paying $65,000 in taxes annually. The spouse had chronic medical expenses that cost $15,000 per year out of pocket, that were non-deductible due to their income. The client also spent several thousand each year on continuing education, travel, and licensure expenses that were not deductible.

The client wanted a 5-7 year retirement plan, has a conservative investment outlook, and wanted comfort that their assets would cover both retirement needs and medical care.

Fortunately, they called one of our partners at Cash Balance Advisors!

The Plan:
Based on the client’s preferences, cash flow needs, and budget, we designed their custom tax plan with:

• a newly formed professional association employing the pediatrician, contracted with the previous employer
• designed a retirement savings plan to contribute $110,000 annually into conservative investments to protect principal
• enhanced health care coverage and elected a tax-deductible medical reimbursement plan paid for by the association
• implemented tax-deductible travel and education reimbursement plans paid for by the association

The Results:
An overall 80% tax reduction with combined Federal & State taxes reduced from approximately $65,000 per year to:

2016 – $32,672
2017 – $12,712
2018 – $12,883

The pediatrician realized increased retirement savings of $176,000 during 2016 and 2017 of which $91,000 was funded with tax savings, and long-term net worth increases of over $1Million – all directly attributed to the tax plan.