Structure, Strategy, Savings: Unlocking $1.2M & Future-Proofing the Company

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Background

A successful mid-sized business with multiple entities engaged our firm for strategic tax planning & compliance. Though profitable, their structure had grown complex, & they suspected they were overpaying.

Our discovery process uncovered over $1.2 million in immediate tax savings, along with long-term opportunities in estate planning and entity strategy.

Solutions

Through our Tax Discovery Process, we identified & implemented the following strategies:

 

  • Closed a Dormant Entity: Dissolving an inactive LLC & deducting the capital account balance generated $30K in tax savings.
  • Reclassified Inventory: Leveraging the small business exception allowed one entity to deduct $50K in inventory, saving $12K in taxes.
  • Compensation & Dividend Realignment: Restructuring owner compensation reduced individual income taxes by $110K annually while preserving retirement plan contributions.
  • Entity & Rent Optimization: Increasing intercompany rent and utilizing pass-through entities eliminated $47K in corporate taxes and saved $23K per $100K in related-party payments.
  • Strategic Estate & Gift Planning: Avoided an estimated $3.8M in future estate tax

Conclusion

Our strategic tax planning helped this client reduce immediate tax liability by over $1.2 million while setting the foundation for long-term growth, succession, and continued savings.

Solutions

Challenges

  • Outdated accounting method inflating taxable income

  • Corporate structure exposed to double taxation

  • No estate plan in place before exemption changes

  • Overlooked captive insurance opportunity

  • Tax-inefficient owner compensation 

Benefits

  • Total Tax Savings: $1.2 Million+

  • Reduced Estate Tax Exposure

  • Improved Structure for Growth & Succession

  • Lower Corporate & Personal Tax Burden

  • Better Use of Tax-Advantaged Strategies

Save money, make money, stay out of trouble, have fun.™

BGW Accounting Firm
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BGW is the brand name under which BGW Advisors, LLC provide professional services. BGW Advisors, LLC practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. BGW Advisors, LLC and its subsidiary entities, which are not licensed CPA firms, provide tax, advisory, and other non-attest services to its clients. The entities falling under the BGW brand are independently owned and are not liable for the services provided by any other entity providing the services under the BGW brand. Our use of the terms "our firm" and "we" and "us" and terms of similar import, denote the alternative practice structure conducted by BGW Advisors, LLC.