How We Saved A Client $300K in 1-Hour

Tailored Plans

‍In the dynamic world of entrepreneurship, finding the right tax strategies can often feel like navigating uncharted waters. That's where our accounting firm steps in, offering tailored strategies to your specific industry and the customers that you serve.

Our client did a lot of work for non-profits, and due to the high-end product that they offered they priced a lot of people out. That is what sent us digging in the tax code.

We found in IRS Publication 526, that you can donate "Trade secrets" and "Know-how" to a qualified charity organization and be able to deduct the fair-market-value for that.

Implementing Plans

‍The big thing for them was being able to keep potential customers in the pipeline, so we came up with the plan to donate the design for the high-end product (which roughly cost between $25K - $75K depending on the size) and in return they would give the customer a deductible receipt for that deliverable. During our conversation, they identified 6 customers that would be about $50K each for us to implement the plan with, and before the end of our conversation all 6 had agreed to take part.

By offering that one plan, our client was able to make $300K tax-free in our one hour conversation.

That's not even the best part. Not only do they get the $300K tax benefit, but they now are delivering a design that the potential customer will fall in love with and naturally want to purchase once they are at a place that they can afford it. Therefore, keeping the potential customer engaged and primed to buy later on down the road. They are benefiting in both the short-term and long-term now.

Importance of a great tax strategy

‍At our accounting firm, we understand that every client is unique, with their own set of goals, challenges, and aspirations. That's why we take a personalized approach to tax strategy with each of our clients, taking the time to learn the nuances of their business. As you can see with this client, by having a great tax strategy they were able to keep potential customers that normally would have been lost due to being priced out, get the tax benefit in the short-term, and create future buy-in from the customer by delivering a high-end design that they fall in love with. If all 6 customers end up purchasing the final product, it will result in over $1 million in revenue that would have been completely lost in the past.

‍That is the power of tax strategy.