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5 Common Tasks for a Tax Planning Service

August 12, 2022 TaxPlanIQ Support team

Every penny you help your clients save on their taxes is more money they can invest in their future. This also means that they will discover higher ROI, allowing them to retain your tax planning services for the long term. 

As their tax manager or financial planning service, it is your duty to ensure that you provide the best possible service to help them reach their financial goals.

But honestly, this is not an easy task. 

The tax code is incredibly complex, and it is constantly changing. This makes it challenging to provide excellent tax planning services year after year. However, by understanding some of the common tasks involved in tax planning, you can stay ahead of the curve and help your clients save money.

Here are 5 common tasks that your tax planning service should be able to provide:

1. Discovering a Client's Nexus

A client's tax nexus is a business's connection to a state or jurisdiction. This means that if your client does business in a particular state, they may be subject to that state's taxes, even if they are not physically located there.

It is important to understand a client's nexus to determine which taxes they may be subject to. This can be a complex task, as each state has different rules and regulations.

As a tax manager or financial planning service, you'll first need to meet with your client to discuss their business. You must understand their income, business structure, and plans for the future. This will help you discover their tax obligations and plan accordingly.

Then, you'll need to review their previous tax returns to find any gaps or missed opportunities in their tax strategy. You'll be surprised to find how much more you can save your clients just by looking closely at their previous returns. 

Some business owners end up paying huge tax bills yearly, yet they have multiple deductions and tax breaks available to them that they never knew.

By discovering their nexus and ensuring they take advantage of all available deductions, you can help your clients save massively on their taxes.

2. Finding the Right Strategies

Although everyone's tax situation is unique, certain strategies can be used to lower taxes. These include income shifting, depreciation, and fringe benefits. Depending on your client's particular situation, one or more of these may be applicable.

After sitting down with your client and understanding their business model and structure,  you should research and determine which strategies make the most sense. This may include reviewing past tax returns, reviewing current financial statements, and consulting with other tax professionals.

Can they use an income shifting strategy? 

In the most basic terms, income shifting or splitting is a tax planning technique where you transfer income from a higher tax bracket to a lower one. This can be done by equalizing spouses' incomes through spousal RRSPs or income-splitting pensions. You can also transfer ownership of an income-producing asset to a lower-taxed family member.

Is depreciation applicable? 

Depreciation is an important consideration for business owners, as it can provide a significant tax deduction. When you depreciate an asset, you're essentially claiming a portion of the cost as a business expense each year, which lowers the taxable income. This means that rather than deducting the entire cost of an asset when it’s purchased, you can instead spread the deduction out over the asset's life.

What about fringe benefits? 

Fringe benefits are another potential tax deduction for business owners. These can include company cars, expense accounts, and health insurance. To deduct fringe benefits, you must be able to prove that they're necessary for the business.

TaxPlanIQ has dozens of strategies you can implement to lower your client's tax bill. These include 1031 exchange on real estate, 529 savings plans, adoption incentives, C Corp. miscellaneous deductions, C Corp. 1202 exclusion,  solar tax credits, and many more.

All these strategies have the potential to lower your client's tax bill. But it's important to remember that each one must be used correctly to be effective.

3. Making the Bigger Changes

After determining which strategies make the most sense for your client, you can begin implementing them. This may involve changing how their business is structured, such as creating a new entity or transferring ownership of assets.

It's also important to keep in mind that some of these strategies may have a bigger impact than others. For example, restructuring a business can be a major undertaking and may not be appropriate for all clients.

The same is true for accelerated depreciation. This can be a great way to lower taxes in the short term, but it may not be the best option if your client is looking to sell the business in the near future.

Capital gains offset is another strategy that can greatly impact taxes. This allows your client to offset any capital gains they may have with losses from other investments.

At the end of the day, the goal is to lower your client's tax bill as much as possible. But it's important to make sure that the strategies you use are appropriate for their individual situation to avoid compromising their long-term financial goals.

4. Showing Your Client the ROI

When a business owner or entrepreneur is looking for a financial advisor or tax manager, they're not just looking for someone to help them save money on taxes. They're looking for someone who can provide value and help them grow their business.

This is where you can really set yourself apart from the competition. By showing your clients the ROI of your tax planning services, you can demonstrate the value you bring to the table and how you can help them reach their financial goals.

There are a few different ways to do this. One is to show them how much money you'll save them on taxes over the course of your relationship, alluding to your bespoke tax planning strategies.

Another is to show them how your tax planning services can help them free up cash flow, which can be reinvested into the business to help it grow.

You can also show them how your tax planning services can help them take advantage of opportunities, such as tax breaks or incentives, that they may not have been aware of.

But here is the kicker: creating comprehensive ROI reports and simulations is tedious, time-consuming, and overly complicated. Fortunately, TaxPlanIQ can help you with that.

TaxPlanIQ software helps you generate a complete ROI report detailing all the savings various strategies can provide over ten years. This report can then be used to create a customized presentation for each client, highlighting the strategies that will save them the most money.

This incredibly powerful tool can help you close more businesses, demonstrate the value of your tax planning services, and help you get paid fairly for the value you're bringing.

5. Implementing the Strategies

Once your client is sold on the tax planning idea, it's time to start implementing the strategies. This is where TaxPlanIQ can really help you streamline the process.

The platform includes resources, training, and tutorials for implementing each of the strategies available on the platform. This makes it easy to get started and ensures that you use the strategies correctly to maximize savings.

TaxPlanIQ also offers a variety of tools to help you automate the process and make it as efficient as possible. For example, the platform includes a tool that allows you to batch upload client data, which can then be used to generate customized reports.

This is a huge time-saver, as you no longer have to manually input data for each client. And it's just one example of the many ways TaxPlanIQ can help you save time, improve your productivity and retain your clients FOREVER.

TaxPlanIQ Makes Your To-Dos Easy

If you're looking for a way to streamline your tax planning process and free up your time, TaxPlanIQ is the perfect solution. The platform offers a variety of features and tools to help you save time and improve your productivity.

From automated report generation to batch data uploads, TaxPlanIQ makes your to-dos easy. And with resources, training, and tutorials available for each of the strategies on the platform, you can be sure that you're using the strategies correctly to maximize savings.

If you're ready to take your tax planning business to the next level, TaxPlanIQ is the perfect solution. Sign up to start your free trial today and access 16 tax strategies, on-demand video support and knowledge base, custom branding, and other business-critical features to help you close faster and grow your business. 

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