Case Design
Background
A corporate executive with W-2 income of $4,000,000 had zero deductions available due to various phase-outs and limitations, and was paying over $1,500,000 each year to the government. Current debt payoff was a priority for the client rather than long term savings and retirement strategies.
Fortunately, they called one of our Managing Directors at Redwood Tax Specialists!
The Plan
Based on the client’s preferences, cash flow needs, and budget, we designed their custom tax plan to include the following as part of their larger overall plan:
- A $160,000 real estate investment that, when properly administered, generates large annual deductions to offset wage income and is not limited by passive real estate investment rules.
The Results
A tax deduction of $730,000 reduced the executive’s tax liability by $262,000, delivering a refund of over $252,000!
