For plaintiff attorneys
What is deferring your contingent fee actually worth?
An apples-to-apples, after-tax comparison of deferring fees through a non-qualified deferred compensation plan versus taking the lump sum, paying taxes today, and investing what's left. Real progressive tax brackets for every year, all 50 states, QBI, NIIT, and self-employment tax — with every assumption visible and editable.
Your situation
Payout plan
Investment & fee assumptions
The same gross return drives both options — that's the apples-to-apples rule.
Projected deferral advantage
more after-tax wealth at the end of year 2045 by deferring, versus taking the lump sum and investing after tax.
After-tax wealth over time
Deferral line includes the pre-tax plan balance; both options are fully liquidated and taxed in the final year.
| Where each dollar goes | Lump sum, invest after tax | Deferred comp plan |
|---|---|---|
| Gross fees | $1,000,000 | $1,000,000 |
| Total taxes paid (lifetime of projection) | $642,943 | $800,174 |
| Total fees paid (admin / AUM) | $132,973 | $266,966 |
| After-tax wealth, end of 2045 | $1,021,922 | $1,534,654 |
| Present value today (@ 6%) | $337,758 | $507,223 |
Deferral often pays more total tax dollars and fees — on a much larger base — and still finishes ahead. Both sides use the same 6% gross return and are fully liquidated at the same horizon.
Bonus: deferral restores your QBI deduction
Taking the full fee this year pushes taxable income past the §199A phase-out, so the qualified business income deduction on your remaining practice income is lost entirely. Deferring preserves a $70,201 QBI deduction — roughly $16,848 of extra tax savings this year. If your income stays near these levels, similar savings may repeat in future deferral years.
Get this analysis as a PDF report
We'll email you a professionally formatted copy of these results — every number and every assumption — so you can review it with your CPA.
Prefer to talk it through?
Book a 20-minute reviewYear-by-year detail (show your work)
| Year | Fee / payout | DCP balance | Deferral taxes | Deferral wealth | Lump-sum taxes | Lump-sum wealth |
|---|---|---|---|---|---|---|
| 2026 | $0 | $1,000,000 | $0 | $1,000,000 | $505,757 | $494,243 |
| 2027 | $0 | $1,050,000 | $0 | $1,050,000 | $6,665 | $512,290 |
| 2028 | $0 | $1,102,500 | $0 | $1,102,500 | $7,429 | $530,475 |
| 2029 | $0 | $1,157,625 | $0 | $1,157,625 | $8,084 | $548,915 |
| 2030 | $0 | $1,215,506 | $0 | $1,215,506 | $8,659 | $567,702 |
| 2031 | $0 | $1,276,282 | $0 | $1,276,282 | $9,176 | $586,911 |
| 2032 | $0 | $1,340,096 | $0 | $1,340,096 | $9,653 | $606,603 |
| 2033 | $0 | $1,407,100 | $0 | $1,407,100 | $10,103 | $626,830 |
| 2034 | $0 | $1,477,455 | $0 | $1,477,455 | $10,534 | $647,638 |
| 2035 | $0 | $1,551,328 | $0 | $1,551,328 | $10,955 | $669,065 |
| 2036 | $200,904 | $1,427,991 | $70,226 | $1,558,668 | $4,098 | $698,420 |
| 2037 | $200,904 | $1,298,486 | $71,624 | $1,564,977 | $4,300 | $729,041 |
| 2038 | $200,904 | $1,162,506 | $73,221 | $1,570,005 | $4,511 | $760,982 |
| 2039 | $200,904 | $1,019,727 | $74,989 | $1,573,516 | $4,730 | $794,302 |
| 2040 | $200,904 | $869,810 | $76,906 | $1,575,286 | $4,957 | $829,059 |
| 2041 | $200,904 | $712,396 | $78,958 | $1,575,093 | $5,195 | $865,318 |
| 2042 | $200,904 | $547,112 | $81,134 | $1,572,714 | $5,442 | $903,141 |
| 2043 | $200,904 | $373,563 | $83,428 | $1,567,922 | $5,700 | $942,598 |
| 2044 | $200,904 | $191,337 | $85,831 | $1,560,487 | $5,966 | $983,762 |
| 2045 | $200,904 | $0 | $103,857 | $1,534,654 | $11,028 | $1,021,922 |
Key assumptions in this estimate
- 2026 federal law: progressive brackets, capital-gains stacking, §199A QBI (post-OBBBA), 3.8% NIIT, SE/Medicare tax with the $184,500 Social Security wage base. State: California full 2026 brackets (Tax Foundation dataset).
- Deferred payouts are taxed as ordinary income and self-employment income in the year received; no tax applies at the time of deferral.
- Taxable account: 2% interest + 2% qualified dividends taxed annually; appreciation taxed when realized (25% of gains per year) and at final liquidation, with basis tracking.
- Brackets indexed at 2.5%/yr (current law); NIIT and Additional Medicare thresholds never index (statutory).
- Not modeled: AMT, local income taxes, IRMAA, Social Security benefit taxation, state QBI conformity, NY/CT benefit recapture, step-up at death, qualified-plan interactions, plan-sponsor credit risk.
This tool provides an educational estimate based on the assumptions you enter. It is not legal, tax, or investment advice, and no attorney-client or advisory relationship is created by its use. Deferred compensation involves risks, including the unsecured-creditor status of plan participants. Actual results will differ. Consult your own tax advisor before acting.