Case study
What benefits can a US. business owner realize with the APS program
Construction Company
BOULDER CONSTRUCTION, INC.
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Company is an S Corporation 100% owned by John Boulder (Age 52)
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Revenues = $8 mm, Payroll = $1 mm
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Salary and K-1 income to John = $800K
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2 Key employees: Johnny (son) and Mike (nephew)
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$25K in annual non-deductible business expenses
GOALS
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Reduce income taxes (currently pays approximately $360K in taxes on
$800K income)
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Defer income (he only needs his current salary from the company to
meet his lifestyle needs)
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Wants to reward and motivate Johnny and Mike
FINANCIAL SUMMARY
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TOTAL TAX SAVINGS $202K ($450K X MARGINAL FED AND STATE
COMBINED RATE OF 45%)
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TOTAL PRE-TAX DEFERRED COMPENSATION SET ASIDE = $390K FOR
BENEFIT OF JOHN, HIS SON AND NEPHEW
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