Situation:
Sandra (52) is a successful restaurant franchise business owner generating strong annual income, but has grown increasingly frustrated watching a significant portion of her earnings go toward federal and state taxes. With  an effective tax rate approaching 40 percent, Sandra finds that nearly $400,000 of every $1 million she earns is lost to taxes. Despite working with advisors, most strategies she has seen focus on deferring taxes rather than meaningfully reducing them.

As her income continues to grow, so does her tax burden. Sandra begins looking for a more proactive approach that would allow her to preserve more of what she earns without disrupting the success of her business.

Solution:
Sandra and her wealth advisor discuss how the Luminara strategy works and what it could mean for her overall tax position.

Through this approach, Sandra participates in a qualified investment designed to generate substantial tax advantages in the first year. The structure allows her to apply a combination of deductions and credits directly against her taxable income and existing tax liability.

The process is coordinated to ensure all participation requirements are met within the tax year, allowing her to fully access the available benefits. At the same time, the strategy aligns with broader economic initiatives, providing an added layer of purpose behind the investment.

Sandra is able to integrate this approach into her existing financial plan without changing the way her business operates.

Result:
Under her previous approach, Sandra would have continued paying close to 40 percent of her income in taxes each year, resulting in approximately $400,000 lost on every $1 million she earned, with little ability to meaningfully reduce that burden.

By implementing the Luminara strategy, Sandra is able to significantly reduce her taxable income in the first year while also applying credits directly against what she owes. In cases where her credits exceed her current tax liability, she is able to apply those benefits to prior years, creating additional liquidity through refunds. For Sandra, that translates to keeping hundreds of thousands of dollars that would otherwise have gone to taxes, giving her more capital to reinvest, more flexibility in her planning, and a clearer path forward as her business continues to grow.