If you have a client who has been writing six-figure checks to the IRS for years, this case study is worth your time.

A husband and wife in healthcare consulting, earning around $800,000 annually, had persistent tax liabilities for two decades. They worked with a financial advisor. They had a plan. But year after year, the tax bill came back.

Three years ago, their advisor partnered with The Owner's Asset. This past year, the couple owed very little to the IRS, holds tax-free assets, and has a retirement picture that finally reflects the success of their business.

The tool that made the difference was Section 401(a) of the tax code, and it is one that many high-income business owner clients never hear about.

What CPAs Need to Know About the 401(a)

Most of your business owner clients are familiar with the 401(k). The 401(a), specifically the cash balance and defined benefit plan structures that fall under it, operates on the same basic framework. Pre-tax deductions on the way in. Rolls into an IRA on the way out. About 96% of the mechanics are identical to what your clients already understand.

The differences are where the planning opportunity lives.

The contribution limit in a 401(k) is $23,500 this year for most participants. In a 401(a), depending on the client's age and income, the annual deduction can reach as high as $350,000. For a business owner at $800,000 in annual income, that is a planning conversation that changes the entire tax picture.

The second major difference is asset allocation. In addition to standard investment options, a 401(a) allows the purchase of annuities and dividend-paying whole life insurance with pre-tax dollars. For clients who need a zero-volatility component in their retirement plan, the ability to acquire that asset with pre-tax dollars rather than after-tax dollars represents a significant cost advantage.

At a 37% combined federal and state tax rate, a client funding $100,000 in annual life insurance premiums with after-tax dollars is spending approximately $140,000 in gross income to do so. Inside a 401(a), that same premium costs approximately $62,500 in gross income. Same asset. Significantly lower cost.

How the Advisor Partnership Worked

In this case, the couple's existing financial advisor recognized that the 401(a) strategy required a level of specialization outside their core expertise. Rather than letting the opportunity pass, they brought in The Owner's Asset as a partner.

That kind of collaboration is something Mark and Rohit actively support. The goal is not to displace the existing advisor relationship. It is to bring a specific expertise in cash balance plans, defined benefit structures, and ownership banking into the conversation for clients who need it.

The result for this couple was more than one million dollars in deductions over three years, a tax-free retirement asset base, and an annual tax obligation that went from six figures to nearly zero.

The Retirement Outcome

The planning extended beyond tax reduction. With a properly structured 401(a) and life insurance component in place, this couple moved from a standard 4% sustainable withdrawal model to a scenario supporting 5 to 6% annual distributions in tax-free cash flow.

That shift does not just mean more income in retirement. It means that every dollar they draw is not a taxable event, the way an IRA distribution would be. And it means their estate planning goals are covered through the life insurance death benefit, funded with pre-tax dollars, without requiring a separate premium budget.

When Mark and Rohit met with this couple recently, the transformation was visible. Two decades of tax stress had been replaced by financial clarity and the ability to spend what they had spent decades earning.

Is This Applicable to Your Clients?

The 401(a) structure is best suited for business owners with consistent high income, a three-year planning horizon, and a need for both significant deductions and retirement asset accumulation. Healthcare, consulting, and professional services business owners in the $500,000 to $2 million income range are where this conversation tends to be most relevant.

If you have clients who fit that profile and have never had this conversation, The Owner's Asset offers a deduction call where you can explore whether the strategy is a fit.

Book a deduction call directly to start the conversation.

This content is for educational purposes only and does not constitute tax, legal, or financial advice. Results referenced are from a specific client situation and are not guaranteed or representative of all client outcomes.