Roger Scenario

Situation:

Roger (45) is an Inside Sales Manager for a security company and lives in California. He has gradually expanded his client list over the last ten years.

Roger has created a good life in this position and has recently seen an increase in his earnings. Roger has two ways that he earns his wages; a base salary of $180,000 and a 10% bonus for all sales he facilitates for his company.

In 2023 Roger’s bonus will be $500,000; although this is amazing for his family, he is shocked by the amount of taxes owed. During a meeting with his CPA, he was lamenting about the bonus income on his wages. His CPA discussed some exclusive tax mitigation strategies he had recently learned about and how this strategy could be beneficial to reducing Roger’s tax burden.

Solution:

Roger can project a taxable income of $680,000 in 2023. He will owe 40% in federal and state income tax, resulting in a tax obligation of $272,000 in 2023. Logan follows the advice of his CPA and participates in a tax mitigation strategy that utilizes a Section 168(k) bonus depreciation deduction.

Roger will purchase six shares of the Equishare – Fractional Interest for a total of $72,000 equity from his wages and a $288,000 loan provided by the strategy.

Result:

As a result of utilizing the Equishare – Fractional Interest approach, Roger can deduct $288,000 from the bonus depreciation from Section 168(k). The Section 168(k) deduction will also have an $18,000 depreciation deduction he will use annually for the next four years. Roger can reduce his taxable income from $680,000 to $392,000 in 2023. The Equishare – Fractional Interest program will reduce his tax obligation to $156,000. These tax mitigation strategies will increase after-tax cash flow by $43,200 in 2023, with an additional savings of $18,000 in the following four years.