2min chapter

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Cash Balance Plans: Maximizing Client Tax Savings with David Podell

The Modern CPA Success Show

CHAPTER

Maximizing Tax Savings Through Company Structure and Income Adjustments

The chapter delves into the significance of income being pensionable for LLCs, S Corps, and C Corps to qualify for benefits, emphasizing the importance of income over company structure. It also touches on adjusting owner's wages for increased contributions and balancing FICA tax for deduction purposes.

00:00
Speaker 2
So you're kind of quarterback in that whole thing. On the structure side of things, like no, no, I mean, obviously, I know it depends if it's solo or whatever, but LLC versus S corp, versus C corp, no conflicts there with any entity type.
Speaker 1
They all work as long as income is pensionable. So for example, if you only have, you know, real estate, you know, passive income coming in, it's not going to work, where in those cases, we've seen tax advisors will go there. A lot of times there's a management company, and then it works if they're, you know, pulling something out from a possible management company.
Speaker 3
The structure of the company,
Speaker 1
it's irrelevant, but we need income. So if you're an S corp and you're taking a W two of $50,000 and want to get a whole bunch of money in a plan, a lot of times we're going to come back and say, that's got to go up to 100. You're the W two, what that wage is, it is part of the calculation on what that contribution is. Now, we will try to work with what's there, but if someone's looking for a bigger deduction, a bigger contribution into the plan, then we might oftentimes need to
Speaker 2
increase that wage that that that that owner's taken. Yeah, I'm sure you can kind of counterbalance the additional, you know, FICA tax and show again the value there after, you know, tax savings and everything like that. And then tell them, of course, they're going to get a bigger social security check. They should be excited.
Speaker 3
What about just kind of
Speaker 2
switching gears there?

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