Case Design



A pediatrician and spouse with W-2 income of $250,000 and rental properties generating an additional $25,000 of taxable income each year were paying $65,000 in taxes annually. The spouse had chronic medical expenses that cost $15,000 per year out-of-pocket that were non-deductible due to their income. The client also spent several thousand each year on continuing education, travel, and licensure expenses that were not deductible. The client wanted a five to seven year retirement plan, has a conservative investment outlook, and wanted comfort that their assets would cover both retirement needs and medical care.

Fortunately, they called one of our Managing Directors at Redwood Tax Specialists!

The Plan

Based on the client’s preferences, cash flow needs, and budget, we designed their custom tax plan:  

  1. Forming a new professional association employing the pediatrician, contracted with the previous employer.  
  2. Designing a retirement savings plan to contribute $110,000 annually into conservative investments to protect principal. 
  3. Enhancing health care coverage and electing a tax-deductible medical reimbursement plan, tax-deductible travel, and education reimbursement plans paid for by the association.

The Results

We reduced the combined Federal & State tax bill by $32,672 the very first year. Then we saved them an additional $12,712 the second year.