Many of our business-owner clients are concerned about the trend towards higher income
taxes and wish to explore methods to create greater income tax efficiencies in the coming
years. Here are a few strategies we are exploring currently.
 
Strategy #1 - Retirement Plan Design (or Re-design) 
 
We have been hearing from firms that they need help re-evaluating their 401k plans after the
recent events. Many plans are cookie cutter, one size fits all, generic “safe harbor” plans that
don't receive the support they need.  By customizing a plan to your business, you may be able
to accelerate your personal retirement deferrals while also reducing current income taxes with
a “high deductible” retirement plan. Done properly, a business owner can set aside 2-10 times
more money pre-tax which reduces income taxes and increases personal retirement benefits. 
 Working with retirement plan specialist will also improve your employee experience and
satisfaction with the plan. 
 
After Step #1…. 
 
After maximizing contributions to a high-deductible plan or in situations where the high-
deductible plan isn’t a fit, we typically explore two additional strategies for business owners… 
 
Strategy #2 - Tax deductible contributions to fund long term care plans, and/or 
 
Strategy #3 -Using after tax money to fund institutional insurance contracts to minimize or
eliminate future income taxes 
 
Strategy #2 - Tax deductible LTC planning 
 
As a business owner, you can deduct a large portion of the monies used to fund a long-term
care policy.  These tax-deductible premiums create a much larger bucket of tax-free money to
pay for long term care.   S-Corp business owners can typically deduct 40-60% of the premiums
while C-Corp business owners can 100% of the premiums.  
Understandably, many of my business owner clients are currently exploring this planning
opportunity as well. I have attached a sample report of a plan we have recently shown to a
client. 
 
Strategy #3 – Institutional Insurance Contracts 
 
This strategy uses an institutionally priced insurance contract to take advantage of favorable
Internal Revenue Service rules to lessen – or eliminate – future taxes on investment gains.
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We structure the design to have the lowest cost insurance wrapper necessary to gain income
tax deferral while retaining access to the funds with the end goal being to provide a large
amount of non-reportable tax-free income.  The wrappers can be annuity or life insurance
based.
 
Additionally, in certain – but not all states, you can gain enhanced asset protection by using
these insurance wrappers.