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Critical Capital Mass (CCM)

Critical Capital Mass

A worksheet to determine how much in unnecessary income taxes you are paying

This spreadsheet is most helpful to business owners who have control of their 401(k)/Profit Sharing/Defined Benefit plan(s) or business owners who use or can use captive insurance companies (both qualified plans and CICs help business owners significantly reduce their annual income tax liabilities).


1) Estimate your annual living expenses (food, clothing, travel, entertainment, automobile, rent, college funding, mortgage (with your mortgage calculate the after tax costs due to the income tax deduction on your personal taxes), etc…

2) What is your combined federal and state income tax rate expressed as a decimal (for example 40% = .4)

3) Take your income tax rate, subtract 1, and multiple by minus 1.

4) Divide your annual living costs by (b) to calculate how much taxable income you need to take home each month to pay your living expenses.

5) Estimate your “net” practice or business income after all expenses (do not deduct your personal income (this number should be your take home income before income taxes or matching payroll taxes)).

6) Calculate your total pre-tax income.

7) Subtract living expenses from pre-tax income

8) Multiply “surplus” pre-tax income times 40% to calculate estimated annual losses to unnecessary income taxes.