What benefits can a US. business owner realize from the advance planning strategies (APS) program? Case Study Miracle Kleen, INC.

Case study

Manufacturer

MIRACLE KLEEN, INC.

• Miracle Kleen is comprised of two C-corporations (MK1 and MK 2) which are 100%
owned by the White Family. These entities create, design, market, and distribute
cleaning products all over the world
• Revenues (combined) = $30 mm,
• Qualified Payroll (combined) = $750K, Pre-tax net income (combined) = $7 mm
• Salaries to Jim and Wanda White (Owners) = $800K
• 2 Key Employees: Adam and Brandi

GOALS

• Reduce Tax Bill (currently pays approximately $2.8mm in corporate taxes and additional
45% marginal tax on all distributions)
• Retained earnings balances need to be normalized
• Defer income (they only need their current salary from the company to meet lifestyle
needs)
• Want to reward and motivate Adam and Brandi
Financial summary
• Total annual tax savings = $2,000,000
• Total pre tax amount set aside in selective compensation agreements
for owner's future = $5,035,000
• Retained earnings normalized. Amount left in operating entity equals
working capital needs

The following summary was an actual case installed by THE APS PROGRAM Specialist.
Company names and participants have been changed