Client Profile

1. Filed an amended return to correct the prior year. Once we identified the issues on the previously filed return, we amended it — resulting in a $25,000 refund for a year that had already been closed out.

2. Implemented a cash balance retirement plan. Standard retirement plans like a 401(k) cap out relatively quickly for a high earner. A cash balance plan is a defined-benefit plan that allows substantially larger, actuarially-determined contributions — often well into six figures annually depending on age and income — all of which are deductible business expenses. For this client, it became a core piece of both retirement funding and current-year tax reduction.

3. Took a hard look at his Qualified Business Income (QBI) deduction. Under IRC §199A, the QBI deduction begins phasing out once taxable income exceeds certain thresholds, and can be eliminated entirely for owners of specified service trades or businesses — a category that includes many consulting practices — once income rises high enough. This client was losing a meaningful piece of the deduction simply because no one had structured his taxable income with the phase-out in mind. By reducing taxable income through the cash balance plan contribution, we were able to pull a larger share of the QBI deduction back into play.

4. Made the Louisiana Pass-Through Entity (PTE) tax election. Louisiana allows pass-through entities to elect to pay state income tax at the entity level rather than passing it through to the owner individually. Under IRS Notice 2020-75, that entity-level tax is deductible as an ordinary business expense on the federal return — with no cap. For high earners, this matters even more than it used to: while the federal SALT cap was raised to $40,400 for 2026, that increase phases back down for taxpayers with modified AGI above roughly $500,000. For a business owner earning over $1 million, the PTE election remains one of the most reliable ways to preserve a full state tax deduction at the federal level.

5. Found over $15,000 in missed deductions. A line-by-line review of the business's expenses surfaced deductions the prior accountant had simply missed — legitimate business costs that were never claimed.

Case Studies - CASE sTUDY 2

None of these strategies required aggressive positions or gray-area interpretations — they're well-established tools under the tax code that simply weren't being used. What made the difference wasn't any single strategy, but a firm willing to look at the whole picture: the entity, the retirement plan, the state election, and the return itself, together, rather than treating each piece separately.

If you're a business owner earning seven figures and your accountant has never mentioned a cash balance plan, a QBI phase-out strategy, or a pass-through entity election, it may be worth a second look at your return.

Have another question? Email us at info@crescentcpaadvisors.com

How a Consulting Firm Owner Cut His Tax Bill by $130,000 a Year — Plus a $25,000 Refund on a Prior Return

Owner of a consulting firm with four employees, earning over $1 million per year. Previously worked with another accountant for tax preparation.

This client came to us confident his prior returns were in good shape — he had a longtime accountant and had never had any red flags. But a detailed review of his most recent filed return turned up several issues we've now seen repeatedly with high-earning business owners: missed deductions, an under-optimized entity structure, and a Qualified Business Income (QBI) deduction that was being phased out with no strategy in place to address it.

For a business owner at this income level, these aren't small oversights. Each one, left unaddressed, compounds year after year.

The Problem

What We Did

The Result

Why This Matters

$25,000 refund from the amended prior-year return

$130,000 reduction in the client's annual tax bill, every year going forward

A retirement strategy that builds wealth while reducing current taxable income

A state tax structure that protects the full value of his Louisiana tax payments at the federal level

This case study reflects an actual client engagement with identifying details removed for privacy. Individual results vary based on each taxpayer's specific facts and circumstances, including material participation, property type, and income composition. This content is for informational purposes and does not constitute individualized tax advice.