Case Studies

Case Studies

Case Studies

Personal Finances

Tax Wealth Network helps real estate agents and brokers in two key ways: their personal tax planning and winning more listings with the help of the IRS.

Problem – Personal Finances

As a Realtor professional, you have access to tax strategies that can significantly reduce your taxes. Too often, real estate professionals simply file their taxes near the tax deadline. Or worse, they’ll go on extension and miss out on many tax-saving opportunities with deadlines long before when taxes are due. And then they’re also playing catch up when it comes to figuring out what they should be paying for estimated taxes for the upcoming year. By missing deadlines, a self-defeating cycle starts where a professional ends up owing more in taxes because of their success, but they lack the cash flow to implement options that will lower future tax bills.

Each year, a very busy and successful Realtor in Texas simply filed her tax return extension in April and waited until mid-October to have her returns completed. She was often surprised by a federal tax bill that often exceeded $50,000. Her tax preparer would file her extension, but never spoke to her about ways to lower this tax liability or help with her cash flow. And by missing estimated tax payments, she would incur additional tax penalties and interest each year.

Tax Wealth Network Solution

When this client was referred to us, she wanted to get a handle on her finances and lower her tax bills. Through our Signature Tax & Financial Planning Program, we worked to help her understand her personal and business cashflows. We were able to help her identify her target cash reserves needed to run her household and her multi-office business, and find her a no-cost solution where she could park cash for a FDIC-insured yield that was double the average found at local banks.

While cash flow projections were important for her, the most valuable service we provided was to help her project her tax liabilities for the current and future years, set up an automated schedule to pay quarterly taxes to avoid tax penalties, and help her implement several business tax planning strategies to reduce her overall tax bill while also improving her retirement security. Before tax planning, she as on track for taxable income near $200,000 with a tax bill of about $55,000 or 30% higher than her previous year. Based on this projection, we set her up for estimated tax payments that avoided a tax penalty. And by implementing business tax planning strategies focused on benefits and vehicle deductions, we were able to bring down her taxable income. Then we showed her how put in place a business-sponsored retirement plan that further reduced her taxable income, resulting in an actual tax liability that was about 14% lower than initially projected.