Case Study: Using TaxPlanIQ to Communicate Value to Your Clients

TaxPlanIQ is the perfect tool for accountants. It allows you to build a comprehensive tax plan and demonstrate your value to your clients in an easy-to-understand format. 

The report you receive once your client's information and your strategies have been placed in TaxPlanIQ clearly shows the total tax savings and the return on investment your clients will see when they work with your firm.

Below are two case studies that demonstrate how TaxPlanIQ can be used to bring clarity and proof of value to your tax plan when you present it to your client.

Case 1

Gary met with Sharla to discuss a potential tax plan for his clients. His goal was to get some clarity and refine his current strategies. 

Background Info 

Gary’s clients are a couple filing their taxes jointly. They have two kids, ages 8 and 5. The husband was living in Texas while the wife was in California but now they are both living in Texas. They file with a 1040 and an S-corp which is a rental business consisting of two properties. This is bringing them a low, passive, income. The first property only collected one month of rent while the second collected a full year.

Additionally, they are both receiving W-2s. He is an owner of a tech company while she works for a different tech company. She is also the owner of a consulting business and files a Schedule C. They currently are claiming $28,000 in losses on a Schedule E and went through a bout of collecting unemployment.  

Questions for the Clients

After reviewing all of the information provided, Sharla determined there was not enough to make a solid tax plan. She gave Gary a list of questions to answer and come back with before moving forward.

• Does the husband own 100% of the stock in the company? In other words, does he have control? 
• Does the Schedule C have any differences moving forward? 
• Did they buy or sell the first property in 2021? Will this property look different in 2021? 
• What is the S-corp entity? Is it a real estate business or just rental properties? 

Sharla also requested a depreciation schedule and corporate returns if the husband has control over the company. 

Once this information is provided, Sharla and Gary can move forward with using TaxPlanIQ to craft a tax plan. 

Case 2

Kimberly met with Sharla to discuss a potential client. The purpose of the meeting was to determine if Kimberly could craft a tax plan even though the couple did not prepare in 2019 or 2020. 

Background Info

Kimberly’s potential clients are living in Washington and currently use a 1040, 1065, 8825, and a Schedule F. They bought their farm with a private loan for $4.8 million and their mortgage is $69,000. They have $100,000 in depreciation costs. There is a rental on the property, however, they moved into the house in 2021. 

They have two daughters on the return. The oldest is college-aged and the youngest is 7. The couple also has a farmhand living on their land as he works and is paid a salary.

Ways to Save

To save on depreciation, Sharla suggested sectioning their land to pull out the rental property making it non-deprecating. She also suggested separating their operational income by adding an 1120S.

Another possibility for savings includes claiming that horse care is a 24/7 responsibility and the farmhand lives on their land at the expense of the employer. This would allow them to allocate a personal use percentage to include in their W-2 income or guaranteed payments. However, this savings strategy would require legal justification before moving forward.

Sharla also suggested looking into a variety of college student strategies but due to time constraints, didn’t dive into much detail. 

Findings

Sharla began inputting some of the suggestions she made for Kimberly’s potential clients into TaxPlanIQ.

Some of the strategies she included were: 

• Hiring their children
• Running a cost segregation
• Implementing (just a few of many) college student strategies

Because the end of the meeting was approaching, Sharla did not have time to input each potential saving strategy, however, with the few she did include, she was already able to show $30,000 in savings. There are more savings on the table for Kimberly to include at a later date. 

With more time and information, TaxPlanIQ will help both Gary and Kimberly prove their value to their clients. If you are interested in using TaxPlanIQ to better explain your value to your clients, sign up for a free trial today!