How I Reduced a
$150k Tax Bill to $5k !

Client Profile: A successful construction business owner came to Skyline with a shocking tax bill of $150,000. His income was strong, but the business’s books were inconsistent, expenses were misclassified, and prior tax filings lacked the depth of planning needed for his complex situation. No one had ever implemented the right strategies for him.

The Game Plan: Strategic Moves That Saved Six Figures

After an in-depth review of his financials and IRS transcripts, we built a multi-layered plan to align his accounting methods, deductions, and structure with IRS standards, while maximizing every legitimate opportunity, such as:

1. Switched to Accrual Accounting: By deferring income from incomplete projects and accruing outstanding expenses, we accurately matched revenue and costs — smoothing taxable income.

2. Leveraged Section 179 Deductions: We immediately wrote off the cost of new vehicles and heavy equipment used in the business, creating substantial upfront deductions without affecting cash flow.

3. Hired His Daughter in the Business: She began helping with marketing and administrative work, allowing him to legally shift income to a lower tax bracket while keeping funds within the family.

4. Claimed a Supported Relative as a Dependent: We identified that he was financially supporting a family member who qualified as a dependent, unlocking additional credits.

5. Applied the Augusta Rule (IRC §280A): We structured board meetings at his personal residence, allowing the business to rent his home for up to 14 days per year.

6. Optimized Home Office Deductions: We calculated the portion of his home used for business, including utilities, insurance, and depreciation, ensuring full compliance while maximizing value.

7. Reclassified Bookkeeping Errors: Many expenses had been posted to non-deductible or incorrect categories. We corrected those classifications, recovered deductions, and cleaned up years of inaccurate records.

8. Reviewed All Financials at No Additional Cost: We performed an audit-style review of his financials, identifying additional deductions and ensuring his numbers matched IRS income transcripts exactly preventing red flags.

9. Deducted Legitimate Business Travel: Some travel originally treated as personal had clear business purpose. With proper substantiation, we converted those into valid deductions.