Insurance Agency Owner Saves $88,000 with Captive Insurance Strategy
My insurance agency generates $2.4 million in premium volume. I had been with the same CPA for a decade, and while he kept me compliant, I always felt like there had to be more to tax planning. AE Tax Advisors proved me right.
The biggest strategy they implemented was a captive insurance arrangement. My agency faces real risks -- errors and omissions, cyber liability, key person loss, regulatory changes -- and a properly structured captive allows me to insure against those risks through a company I own, deducting the premiums while building wealth inside the captive. My old CPA never even mentioned this as a possibility.
They also restructured my entity setup to separate the agency operations from the real estate I own where the agency operates. This created additional tax benefits through rental income treatment and opened up cost segregation opportunities on the building.
Finally, they optimized my compensation structure, balancing salary, distributions, and retirement plan contributions for maximum tax efficiency. Combined savings: $88,000 in year one.
What I valued most was the thoroughness. AE Tax did not just hand me a list of ideas -- they provided a detailed implementation plan with timelines, projected savings by quarter, and clear next steps for each strategy. They also coordinated with my insurance attorney to make sure the captive was properly structured and defensible.
If you own an agency and your CPA has never brought up captive insurance, entity restructuring, or compensation optimization, you owe it to yourself to get a second opinion from AE Tax Advisors.