Three real case studies. Three business owners. Combined federal tax savings of over $619,000 in Year 1 alone — all documented, all IRS-defensible, all using the law exactly as written.
The Strategies Are Written Into Federal Law
IRC §179 elections. Accountable plans under Reg. 1.62-2. Compensation arbitrage benchmarked against third-party surveys. R&D credits under IRC §41. Bonus depreciation under §168(k). Multi-entity depreciation coordination via Form 3115 method changes. Cost segregation studies under Rev. Proc. 87-56.
These are not grey-area strategies. They are not loopholes. They are specific provisions of the Internal Revenue Code, written by Congress, and applied by the IRS every day. The only question is whether your advisor knows how to use them — and whether they're doing it proactively before the tax year closes.
All case studies are anonymized. Dollar figures are rounded. Results vary by individual facts and circumstances. Strategies shown are not universal recommendations.
The Problem
Most 7-figure business owners are operating with the same tax structure they set up when they were making $200K. An S-Corp election. Maybe a SEP-IRA. A few deductions their CPA mentioned once. That's it.
Meanwhile, the IRC contains dozens of elections, credits, and timing strategies specifically designed for profitable business owners — accountable plans, Section 179 elections, R&D credits, multi-entity depreciation coordination, compensation arbitrage — that most compliance-focused CPAs never implement because they're not paid to plan. They're paid to file.
Your CPA calls in March. By then, the tax year is closed. Every strategy that required action in Q2 or Q3 is gone.
Accountable plans, IRC §179 elections, R&D credits, bonus depreciation timing — these aren't complicated. They're just not on your CPA's checklist.
The business owners in our case studies were paying $300K–$400K in federal tax annually. After proper planning, they paid a fraction of that — legally.
The Diagnostic
A real tax strategist asks these before your tax year closes — not after. If your CPA has never raised these, you have a compliance professional, not a planning partner.
Have you implemented a formal accountable plan under IRC §162 and Reg. 1.62-2 for owner-operator expenses?
→ Up to $70K+ in annual taxable compensation converted to non-taxable reimbursements
Has your W-2 compensation been benchmarked against third-party surveys to optimize your S-Corp self-employment tax exposure?
→ FICA savings of $15K–$40K annually depending on revenue
Do you have equipment placed in service this year that qualifies for 100% bonus depreciation under IRC §168(k)?
→ Full equipment cost expensed in Year 1 instead of depreciated over 5–7 years
Has anyone analyzed whether a change from accrual to cash accounting under IRC §446 would benefit your business?
→ One-time §481(a) adjustment can generate $50K–$150K in deductions in the year of change
Do your business activities qualify for R&D tax credits under IRC §41 — including process improvement, software development, or engineering work?
→ Dollar-for-dollar credit against federal tax liability, often $20K–$80K for qualifying businesses
Have you evaluated whether a defined benefit plan or captive insurance structure is appropriate given your current income level?
→ $100K–$300K+ in additional pre-tax retirement contributions or deductible premiums annually
Has a cost segregation study been performed on any real property you own to accelerate depreciation under Rev. Proc. 87-56?
→ Reclassification of 20–40% of building cost to 5–7 year property, generating large Year 1 deductions
Is your entity structure still optimal given your current revenue, income, and long-term exit plans?
→ Entity restructuring can reduce effective tax rate by 5–15 percentage points as income scales
If you answered "no" or "I don't know" to three or more of these questions, you are almost certainly leaving six figures on the table every year.
Real Results
Manufacturing Business Owner · $1.8M Annual Income
This client had operated as a single-entity S-Corp since founding, never revisiting their structure as revenue scaled past $1M. We restructured into a multi-entity model, implemented a formal accountable plan under Reg. 1.62-2, and ran a full IRC §179 election on $340,000 in qualifying equipment placed in service that year — converting a 7-year depreciation schedule into a single-year deduction. An R&D credit study under IRC §41 identified $38,000 in qualifying process improvement activities that had never been claimed. Federal taxable income dropped from $1.85M to $1.52M, self-employment tax fell from $68,000 to $22,400, and total Year 1 savings came to $180,600.
Source: aetaxadvisors.com/case-studies
Strategies Used
Professional Services S-Corp Owner · $850K Taxable Income
This client was a solo professional services owner running an S-Corp at $850K in taxable income, taking a $420K W-2 salary with no formal expense reimbursement structure in place — paying full FICA on every dollar of compensation. We benchmarked their salary against third-party surveys under IRC §162 and reduced it to $285K, then implemented a formal accountable plan under Reg. 1.62-2 that converted $70,300 in personal business expenses into non-taxable reimbursements. A §179 election on $95,000 in qualifying equipment and a bonus depreciation claim under §168(k) added a further $95,000 in Year 1 deductions, and we restructured quarterly estimated payments to eliminate the prior year's $14,000 in underpayment penalties. Federal and FICA liability dropped from $382,400 to $229,145 — a 40% reduction in Year 1.
Source: aetaxadvisors.com/case-studies
Strategies Used
Business Owner · $1.2M Net Income
This client had grown a single operating entity to $1.2M in net income without ever revisiting the structure built at $400K — resulting in a 37% federal rate applied to the bulk of their income with no coordinated strategy across entities. We implemented a multi-entity structure that separated operating income from IP and real property, then filed a Form 3115 accounting method change under IRC §446 to shift from cash to accrual, generating a one-time §481(a) adjustment that accelerated $210,000 in deductions into the current tax year. Depreciation timing was coordinated across entities to stack deductions in the highest-income year, and entity-level credits were applied against the remaining liability. Federal income tax for the year was reduced to $0 — fully documented, IRS-defensible, and built to sustain across future years as income continues to grow.
Source: aetaxadvisors.com/case-studies
Strategies Used
The Math
A hypothetical $1.5M business owner — before and after proper planning. Every line item below corresponds to a real IRC provision.
| Line Item | Without Planning | With AE Tax Co. | Authority |
|---|---|---|---|
| Gross Business Income | $1,500,000 | $1,500,000 | — |
| W-2 Salary (Owner) | $500,000 | $290,000 | IRC §162 / IRS Rev. Rul. |
| Accountable Plan Reimbursements | $0 | −$72,000 | IRC §162 / Reg. 1.62-2 |
| IRC §179 Equipment Election | $0 | −$285,000 | IRC §179 |
| Bonus Depreciation | $0 | −$45,000 | IRC §168(k) |
| R&D Tax Credit | $0 | −$38,000 | IRC §41 |
| Adjusted Taxable Income | $1,000,000 | $800,000 | — |
| Federal Income Tax (37%) | $370,000 | $296,000 | — |
| FICA on Owner W-2 | $34,000 | $19,800 | IRC §3111 / §3121 |
| R&D Credit Applied | $0 | −$38,000 | IRC §41 |
| Total Federal + FICA Tax | $404,000 | $277,800 | |
| Annual Savings | $126,200 |
Hypothetical illustration only. Actual results vary based on individual facts and circumstances. All IRC citations are for reference; consult a qualified tax professional before implementing any strategy.
Year-1 Audit Findings
When we conduct our 3-year lookback on a new client's returns, these are the most common findings — each one representing real, recoverable money.
Owner taking $450K–$550K W-2 salary when the optimal compensation ratio for their revenue level is $240K–$300K. The excess is subject to 15.3% FICA unnecessarily.
Cost: $15K–$40K in excess FICA annually
Fix: Compensation benchmarking under IRC §162 and IRS Rev. Rul. 74-44
Owner paying home office, vehicle, meals, and professional expenses personally or as taxable distributions instead of through a formal accountable plan.
Cost: $20K–$70K in unnecessarily taxable compensation annually
Fix: Accountable plan implementation under Reg. 1.62-2
Business acquired $150K–$500K in equipment and is depreciating it under standard MACRS schedules instead of electing IRC §179 or §168(k) bonus depreciation.
Cost: $50K–$185K in deferred deductions that should have been taken in Year 1
Fix: IRC §179 election and §168(k) bonus depreciation
Business performs qualifying research activities — process improvement, software development, engineering, formulation — but has never filed Form 6765 to claim the R&D credit.
Cost: $15K–$80K in unclaimed dollar-for-dollar federal tax credits annually
Fix: IRC §41 R&D credit study and Form 6765 filing
Business formed as an S-Corp at $300K revenue and never restructured as income grew to $1M+. Multi-entity structures, C-Corp subsidiaries, or holding companies may now be significantly more efficient.
Cost: 5–15% higher effective tax rate than necessary
Fix: Annual entity structure review and multi-entity coordination
Owner contributing $66K/year to a SEP-IRA when a defined benefit plan or cash balance plan could support $150K–$300K+ in annual pre-tax contributions at their income level.
Cost: $30K–$90K in foregone pre-tax retirement contributions annually
Fix: Defined benefit or cash balance plan analysis under IRC §412
Qualification
Per our own case study documentation, these strategies work best when the following conditions are present.
What This Is Not
The Process
Submit your application. We review every submission personally. If there's a meaningful opportunity, you'll hear from us within 24 hours.
30-minute call with our lead strategist. We review your entity structure, income, and current strategies to identify your biggest opportunities.
We audit the last 3 years of returns to identify missed deductions, unclaimed credits, and structural inefficiencies — often finding $50K–$150K in recoverable savings.
We build and implement your custom tax architecture — accountable plans, entity restructuring, depreciation elections, credit coordination — and maintain it year-round.
The Difference
| Area | Your Current CPA | AE Tax Company |
|---|---|---|
| When they contact you | March / April (after the year closes) | Monthly — proactive, year-round |
| Accountable plans | Rarely implemented | Standard — implemented in Year 1 |
| IRC §179 & bonus depreciation | Basic MACRS only | Optimized timing & stacking |
| R&D tax credits | Not evaluated | Identified and claimed where qualified |
| Entity restructuring | Set it and forget it | Reviewed annually as income grows |
| Multi-entity coordination | Not in scope | Core part of the strategy |
| 3-Year lookback audit | Never offered | Included in every engagement |
| Communication | Once a year, maybe | Quarterly reviews + on-demand access |
FAQ