Background 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:
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.