Tax Planning and Analysis

September typically marks the beginning of “tax planning season” for many clients, especially business owners, who are trying to get a handle on their upcoming tax obligations. Below is some information about what you can expect in terms of tax planning and analysis.

First of all, tax planning or analysis is not tax preparation.

  • Tax preparation gets the filing done. The main goal is to make sure your tax reporting complies with both Federal and State tax laws. It deals with historical information.
  • Tax planning provides proactive tax advice. It helps arrive at ways to minimize the amount of tax you must pay.
  • A tax analysis takes planning to the next step. Clients engage us for analysis to give them peace of mind. An analysis, with proper assumptions and due diligence, should eliminate a nasty April 15th surprise. It involves calculations of future taxes and is usually performed to provide a client with a schedule of tax payments to eliminate a tax-due situation and/or to avoid penalties and interest.
  • Scenario analysis takes tax analysis even further. It is an iterative and laborious process of calculating and predicting the value of a set of situations, under a variety of different circumstances or scenarios.

There is no such thing as a “typical” tax plan or analysis. The list below provides examples why some clients contact us for tax planning:

  • Sale of Rental Property or Residence
  • Starting New Business
  • Entity Change consideration (i.e., Sole Proprietorship vs. S Corporation)
  • Ownership in Foreign Business
  • Converting Traditional IRA to Roth
  • Changing Jobs
  • Change in Marital Status
  • Estate Planning

How Much Does it Cost for you to Prepare a Tax Plan or Analysis?

The cost depends upon the level of effort and output you want. The list is in order from least expensive to most expensive:

  1. General information that can be delivered to you in a quick 5-minute phone call
  2. General information, but you want it outlined in writing via email
  3. Using supplied information from you, detailed calculations that answer your question(s) and provided to you in a quick 5-minute phone call
  4. Using supplied information from you, detailed calculations that answer your question(s) and provided to you in report format and emailed to you and/or a consultation
  5. Scenario analysis with a written report of findings and or a consultation

Because each situation is unique, currently we bill for tax planning and analysis on an hourly basis. Our standard rate is $255 per hour.

For more information, contact us so we can get address your planning needs and peace of mind.

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