DHA CLIENT TAX SAVINGS SCENARIO
Clients in the Construction Industry

Sample General Contractor

Background:

This general contractor business focuses primarily on commercial construction projects but also completes a small amount of residential work. The business is in the northern suburbs of the Twin Cities but completes projects throughout Minnesota as well as in neighboring states. After three years of business, the company was experiencing significant growth, but they were not seeing the financial results they wanted. They decided it was time for some professional tax and accounting assistance and reached out to DHA.

Annual Savings Each Year
1) Section 199A (20% Deduction) Optimization $ 6,500
2) Business retirement plan optimization $ 6,000
3) Optimizing fringe benefits and employing family members $ 7,500
Total Annual Savings $ 20,000
One Time Savings (Year 1 Only)
1) Completed Contract Method Accounting Conversion $ 78,000
Total One Time Savings $ 78,000
Estimated Annual Investment Rate of Return 5%
VALUE OF TAX SAVINGS OVER FIVE YEARS $ 215,588

Sample Electrical Contractor

Background:

This electrical contractor works exclusively with residential customers, with a large portion of their revenue coming from working directly with homeowners. In their 4th year of business their marketing efforts gained traction and they were able to double their annual sales. Building on this success, they adopted an aggressive growth strategy for the next several years. They were referred to us by a fellow contractor who suggested that our construction specialty would be a good fit to help them manage and implement tax planning techniques that fit their needs.

Annual Savings Each Year
1) S-Corporation Conversion $ 5,000
2) Section 199A (20% Deduction) Optimization $ 8,500
Total Annual Savings $ 13,500
One Time Savings (Year 1 Only)
Total One Time Savings $ -
Estimated Annual Investment Rate of Return 5%
VALUE OF TAX SAVINGS OVER FIVE YEARS $ 78,326

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