$25K+ in Tax Savings for a Growing Architecture Firm

The Challenge

The firm was growing at nearly 30 percent year over year, with profits rising just as quickly. While growth was welcome, it introduced several complications:

• A household income exceeding $500K with limited tax planning beyond standard deductions
• Uncertainty around eligibility for high-impact deductions available to design professionals
• Multiple retirement plans across employers without a coordinated contribution strategy
• Missed timing opportunities around state-level tax elections that could materially reduce federal liability

Without intervention, the client risked paying unnecessary taxes during their most profitable years and locking into structures that would limit flexibility as the business scaled.

Gelt’s Strategic Approach

Gelt began with a full diagnostic of both the business and household tax picture, then layered strategies intentionally rather than chasing one-off deductions.

Entity and Income Optimization
We confirmed that the S-Corp election remained appropriate given profit margins and salary levels, while also flagging guardrails around owner compensation and distributions to keep the structure defensible as profits grew.

Pass-Through Entity Tax Planning
Because most of the firm’s work was California-based, Gelt identified the Pass-Through Entity Tax election as a major opportunity starting the following tax year. This strategy allows state taxes to be deducted at the entity level, bypassing the federal SALT cap and restoring deductions that would otherwise be lost. While the deadline had passed for the current year, proactive planning positioned the client to capture meaningful savings going forward.

Advanced Deduction Identification
During projections, Gelt uncovered potential eligibility for the Section 179D energy-efficient building deduction tied to the firm’s school and institutional projects. These projects represented a significant share of revenue, opening the door to a powerful but often overlooked benefit available to design professionals.

Retirement Strategy Coordination
With multiple 401k plans already in place, Gelt mapped total contribution limits across employers and identified opportunities to layer additional plans in higher cash-flow years. This ensured the client could move toward the annual maximum without triggering compliance issues or missed contributions.

Results & Implementation Roadmap

By shifting from reactive tax prep to forward planning, the client gained both immediate and forward-looking wins:

• Projected annual tax savings of over $25K through PTET implementation and advanced deductions
• A clear retirement contribution roadmap aligned with income growth
• Increased confidence around compensation structure and audit defensibility
• A planning framework designed to scale alongside revenue rather than lag behind it

Next steps included implementing the PTET election for the upcoming tax year, validating eligibility for energy-efficiency deductions, and executing a coordinated retirement contribution strategy before year-end.

‍

Every strategy came with an explanation and an action item. We went from guessing to executing, and the savings followed.

— Daniel Reyes, Principal Architect and Owner

‍

Conclusion

This case highlights how growing firms often outpace their tax strategy before they realize it. By stepping in at the right moment, Gelt helped this client turn complexity into leverage, converting growth into lasting tax efficiency and long-term planning confidence.

‍