---
title: He trusted his CPA. A second review found $21,000 a year in potential savings.
description: An insurance agency owner was happy with his CPA. Our free 48-hour tax teardown found $21,000 a year in potential savings and $8,707 in avoidable penalties.
---

[Club Capital Blog](https://blog.club.capital)

# [He trusted his CPA. A second review found $21,000 a year in potential savings.](https://blog.club.capital/he-trusted-his-cpa.-a-second-review-found-21000-a-year-in-potential-savings)

 Written by [Club Capital](https://blog.club.capital/author/club-capital) | Sep 30, 2026, 7:12:46 PM

When a captive insurance agent sent us his 2025 tax return, he was happy with his CPA. They had a good relationship, and he felt his accountant struck the right balance between following the rules and finding ways to save him money.

But his agency had changed. Nearly ten years in, he had expanded to two offices and purchased both buildings. His CPA had been with him through that growth. Now he wanted to know whether he was paying more in taxes than he needed to.

Our review identified $21,000 in potential annual federal tax savings, plus nearly $9,000 in underpayment penalties that better payment planning could help him avoid in future years.

Retirement contributions, the family HSA, and the qualified business income deduction were already being handled correctly. Even with those pieces in place, our review identified opportunities to keep more of what he earned.

For Club Capital clients, the work continues beyond that review. Our tax team helps determine which strategies fit their agency and how to put them into practice. The goal is to address these opportunities while there's still time to act, before another deadline passes.

$21,000

Potential annual federal savings from a state tax election that was never made

$8,707

Federal underpayment penalty on the 2025 return, plus a $120 state penalty

## The tax benefit he thought was already handled

The biggest opportunity involved his state's pass-through entity tax, or PTET.

For eligible businesses, PTET can create a federal deduction for certain state tax payments made through the business.

With about $846,000 in S-corp income, our tax team estimated annual federal savings of $21,000.

The agent had already discussed PTET with his CPA and thought it was being used. Yet no PTET credit appeared on the return we reviewed. That was the finding that caught his attention.

That $21,000 is one year's savings. We reviewed only his 2025 return, so we can't say how long the election went unmade. If the same opportunity was available in earlier years and missed, each of those years would have added a comparable amount.

Your state and business structure may present different opportunities. The reason to look is the same: to find out whether you could keep more of the money your agency already earns. That could mean more to reinvest in your team or take home to your family, without needing to sell another policy.

## The cost of underpaying throughout the year

This agent's total federal tax was about $208,000. The return showed just $21 in federal withholding and no estimated payments.

That resulted in an $8,707 federal underpayment penalty, plus another $120 at the state level. Those penalties were an additional cost on top of the tax bill.

The recommendation was to plan payments around projected income and review them during the year. That gives an owner a clearer idea of what to set aside and helps prevent penalties from becoming another annual expense.

## Owner pay needed a closer look

The review also raised a question about reasonable compensation: was the agent's pay appropriate for the work he was doing in the business?

The return reported about $24,000 in combined taxable W-2 wages for the couple. That figure alone doesn't tell us their total compensation, because pretax retirement contributions can reduce the wages shown on the personal return.

Our recommendation was to review the payroll records and document a reasonable salary based on his responsibilities, time spent running the agency, and what comparable work pays.

We also flagged roughly $2 million in commissions that passed through his personal Schedule C before reaching the S-corp. That called for a review of the carrier payment arrangement, entity records, and licensing. The return showed the reporting pattern; confirming why it existed required more information.

## The biggest business question was about the team

As we talked through the agency, the owner was candid about monthly financial reports. A P&L would probably get about 90 seconds before being filed away. What mattered was using those numbers to make decisions.

One producer was in their fourth month, and application counts alone weren't enough to judge whether the role was paying for itself. The owner also wanted to know when a part-time employee might make more sense than a full-time hire.

> "I just don't want to fill a seat to fill a seat."

Club Capital's CFO services help agency owners work through those decisions. We look at production alongside the full cost of each role so owners can understand what a hire needs to contribute and whether the agency can afford it.

## What we would review for your agency

Your agency may have different opportunities. In a complimentary review, our tax team looks at questions such as:

- ✓ Are there deductions or tax elections worth exploring for your agency?
- ✓ Could better payment planning help you avoid underpayment penalties?
- ✓ Does your owner compensation need a closer review?
- ✓ Has your tax plan kept up with changes in your business?

### Start with a complimentary tax return analysis

Book a 15-minute intake call, then upload your business and personal returns through our secure portal. Our tax team will provide written findings within two business days after receiving all required documents.

We will walk through the findings with you and explain how Club Capital could help you act on them through ongoing tax planning. The analysis is complimentary, with no obligation to become a client.

[Book your complimentary tax return analysis](https://meetings.hubspot.com/marcio-lopes/tax-teardown-15-minute-intake-clone)

This example is based on one agency owner's 2025 tax analysis and follow-up conversations. Names and identifying details have been omitted, and some figures are rounded. Potential savings are planning estimates, not realized results or guarantees. This article is for general information and is not individualized tax advice. Tax services are provided by Club Capital Tax LLC.

[View full post](https://blog.club.capital/he-trusted-his-cpa.-a-second-review-found-21000-a-year-in-potential-savings)

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