How to Demonstrate Your Value to Clients

You know as well as anyone that building a client’s tax plan isn’t always an easy task. Then, once the plan is built presenting your value becomes an even greater challenge.

However, TaxPlanIQ was built so you can easily do both! The tool was created by accountants, for accountants, to ensure you are properly demonstrating your value to your clients. 

Below is a case study and a few examples of TaxPlanIQ helping to build solid tax plans and presenting value to clients.

Quick Recap from Jackie

Jackie previously met with Allison about building a tax plan in TaxPlanIQ. Ultimately, with entity restructuring to minimize employment tax, an accountable plan, and a retirement plan, Allison was able to present savings of almost $40,000 a year to her client. 

To ensure Allison was getting proper compensation, Jackie asked how much she was planning to charge. Allison's original plan was hourly, which would turn out to be about $1,000. 

However, through the ROI visualization, she was able to charge a $4,700 implementation fee and a $9,000 a year charge/maintenance fee - $5,000 more than what she charged in the past for upkeep. 

With the help of TaxPlanIQ, Allison created an implementation fee and double her return all with just 20 minutes in the software. She said using the tool made her much more confident when presenting the plan to her client.

TaxPlanIQ Success Story

Ade was a listener on the call but wanted to share some good news. He reported he closed his first tax plan! 

Ade said visualizing the ROI really helped the client to see the savings and allowed Ade to easily walk them through the process. 

He was able to charge $14,800 for implementation and $1,500 a month going forward. 

Quick Cost Segregation Question

Shelite was a listener on the call and had a question about a previous conversation regarding cost segregation. 

Her client had property in a trust which was irrevocable. It was set up so the property was still in the trust and they still had the ability to do the cost seg. However, it would require the wife to qualify for real estate professional status.

The way things are working out for the clients, Shelite determined it’d be better for the client to do the full cost seg in 2023 rather than 2022. Her question for Sharla and Jackie is: could they still do that considering the property was purchased in 2021?

The answer: yes! You can do a cost seg at any point in time - not just when a property is purchased. Costs segs are not an extra deduction. Instead, they are a way to accelerate depreciation over 1 or 2 years rather than 27 and a half years (standard time). Until the cost seg is complete it is straight-line, and then will be adjusted based on time. With cost segregation, the goal is to absorb the cost rather than suspend it. 

Case Study 2

Shanli met with Sharla to discuss her client, Kip. The main objective is to lower the self-employment tax he is being hit with. 

Upon initial review, Sharla noticed there were plenty of opportunities for Shanli to present savings to Kip. 

Below is the client's background information before we cover the tax plan recommendations. 

Client Background

Kip and his wife have three kids. Two are 11 years old and the other is 9. He is running a consulting business and already writes off his expenses while she collects a large W-2. 

They currently have a large capital gain, which was from the sale of a rental. Also, Kip is doing retirement planning by contributing to an HSA. 

Tax Plan Recommendations

Because there were plenty of opportunities for savings, Sharla quickly went through some of the options Shanli could present to her client. 

Here is what she came up with:

• Put all 3 kids on the payroll. This would cover $36,000 of Kip’s income.
• If it makes sense, transition the business to an s-corp to pay the wife. 
• Contribute for to 401K as well. They are already contributing to an HSA but need to max it out. They can put in $3,100 considering they already contribute $4,000.
• If they don’t form an s-corp they could form an LLC and build a retirement plan in that.
• Augusta rule 
• Rely on self-vetted depreciation. This could work for their new Tesla however they have to prove business milage to be greater than 50% before deducting.
• Max out the wife's retirement contributions.
• Charitable strategies could be potential if clients are on board.

Results

With these strategies in place, Shanli could present to her clients roughly $44,000 in year 1 savings and about $41,000 in repeatable savings moving forward.

From there, Sharla and Shanli discussed fees. They determined that implementation could sit around $9,500 and recurring monthly advisory and compliance could come in at roughly $950 beginning in 2023. To account for the current year, the remaining 9 months (at the time of this case study) would total $8,500 in fees. 

At these rates, with these savings, the client would see an ROI of roughly 300%, which is what TaxPlanIQ suggests as the recommended target. 

Sharla emphasized that with more information from the client, these numbers could improve. 

With the help of TaxPlanIQ, Shanli will be able to provide her client with a detailed tax plan and properly display their return on investment!

If you are interested in using TaxPlanIQ to demonstrate your value to your clients, sign up for a free trial today!