Advanced Income Tax Reduction
Reduce what you owe — every year, not just at filing.

The Problem With Reactive Tax Planning

Most business owners and high-income professionals find out what they owe on April 14th. By then, every decision that could have changed the outcome has already been made. The retirement plan contribution that could have sheltered $250,000 was never established. The real estate acquisition that would have generated a first-year depreciation deduction was delayed past December 31st.

The difference between a $400,000 tax bill and a $250,000 one is almost never about tax preparation. It is about decisions made months earlier, with enough time to execute them properly. That is what proactive, year-round advisory is designed to deliver.

Real Estate Depreciation — The Most Powerful Current-Year Tool

When a commercial property is acquired, a cost segregation study reclassifies building components into shorter depreciation lives — 5, 7, and 15 years rather than 39 years. Combined with 100% bonus depreciation, now made permanent under current law, a significant portion of the property's value can be deducted in the year of acquisition.

On a $3 million commercial property, a cost segregation study typically identifies $800,000 to $1.2 million of accelerated property. At a 37% marginal rate, that is $296,000 to $444,000 of first-year tax savings — in the year the property is placed in service. We conduct these studies in-house, coordinated directly with the return filing from the first year of ownership.

Defined Benefit and Cash Balance Plans

For business owners with profitable operations, a properly designed defined benefit or cash balance plan can generate annual contributions — and tax deductions — of $200,000 to $300,000 or more depending on age. This far exceeds the contribution limits of standard retirement plans and represents one of the most reliable current-year income tax reduction tools available.

The plan is actuarially designed, filed annually on Form 5500, and funded with pre-tax dollars that compound inside the plan. We design the plan, coordinate with the plan actuary, and handle all required filings.

QSBS Section 1202 — Up to 100% Exclusion

For clients who own or invest in qualifying C corporation stock, Section 1202 can exclude up to 100% of capital gains — up to $15 million of gain per issuer — when the required holding period is met. The One Big Beautiful Bill Act expanded these benefits significantly, introducing a tiered holding period starting at three years and raising the qualifying asset threshold to $75 million.

This is one of the most powerful tax provisions in the entire code, and one of the most underused. For a business owner selling a qualifying company with $10 million of gain, the federal tax savings at current rates is approximately $2.38 million — tax that simply does not exist under a properly structured Section 1202 exit.

R&D Credits, QBI, and SALT Optimization

The R&D tax credit under Section 41 provides a dollar-for-dollar reduction in income tax liability for qualifying research activities. Many business owners assume this applies only to technology companies. It does not — manufacturers improving processes, medical practices developing new protocols, and professional firms building proprietary software tools may all qualify.

The QBI deduction under Section 199A, now made permanent, provides a 20% deduction on qualified pass-through business income, subject to phase-outs and W-2 wage limitations that require careful planning to maximize. And with the SALT deduction cap raised to $40,000 for 2025 through 2029, clients in high-tax states have meaningfully more federal deductibility restored.