Chris & Erin

Age: 40
Family: 2 kids

$500,000 in business income

Have invested every dollar into their small business

What made them reach out?

Chris & Erin have been pouring everything into their business and are breaking through to the other side. Over the last year, the business has taken off and they don’t have enough time in their day to figure out what to do with the money. On top of that, they just got through their first tax season after their business growth and were shocked when they got their bill.

Chris & Erin’s main goal was to make sure they were paying the right amount in taxes while making sure they didn’t have to go back to the way it was before the business started doing well.

What We Found

When we dug into their situation, we identified their key goals and we found a few key areas to focus on:



Chris & Erin hadn’t done any proactive tax planning. If they didn’t change anything, they would owe ~$176,000 in taxes. Luckily, after our review, we identified some tax planning strategies that could save them money on their taxes.


The second and possibly most important item that we identified was the risks they faced. Due to their family income splits, Chris at $400,000 and Erin at $125,000 there was a significant risk to the family goals if Chris was unable to work. While there would be a hit if Erin was unable to work, their goals would not be at risk. If Chris was unable to work they would not be able to achieve their goals as identified. Another thing we discovered is that Chris works on his own and has no future desires to hire and manage employees. Because of this, there is no safety net to his business income.


Chris & Erin did not have much in the way of savings outside of their businesses as of yet. However, because Chris is a one man-show, they need to maximize their investments because there is no value for the business to be sold for in the future. Planning now, will lead to optimal investment decisions.

What We Did

For taxes - we created a tax plan to run them through the options available to them:

• Because Chris is not planning to sell the business, we elected an S-Corp to reduce self-employment taxes. This had the double effect of increasing his QBI Deduction with the increases to his W-2 wages paid!

• Retirement Plan - we also implemented a solo 401(k) plan at work for Chris. This is a flexible plan that results in significant tax savings and if his business grows we discussed how we could make further adjustments to increase the savings in the future!

• PTET Election - we also made the PTET Election which will help deduct some state taxes against federal income! This is only available because we switched to an S-Corp.

For protection - in our protection plan, we did the following:

• We identified the largest risk, that Chris would be unable to work. To solve this, we recommended utilizing a disability policy which insures that his income does not stop due to sickness or accident.

• In that same vein, we identified that a life insurance policy was needed for Chris, but not Erin. However, they did want to purchase a small plan for Erin as well to help Chris through the first year or two if something happened.

• We also helped them setup a high-yield savings account for their emergency fund.

• An umbrella policy was also recommended to protect their assets and it will be increased as the assets grow.

For growth - after we did all of this, we could confidently save towards their goals:

• We re-allocated Erin’s 401(k) to a long-term allocation designed to maximize returns

• We setup Chris’s 401(k) plan and invested for the long term

• We also set up their brokerage accounts to retain flexibility over the long-run and allow them to retain control while paying for trips & their children’s needs.

• Taxes will be minimized through use of ETFs and Tax Loss Harvesting.

By looking at all of their needs at once, we were able to deliver a plan that works in their best interest to help them reach their goals. However, the only reality is that life will change so by building this framework we are ready for wherever life takes them.

You've invested everything into your business.
Now it's time to invest in yourself.
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