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tax planning

Tax Planning Services

Posted Sunday, June 19, 2022

Accurate estimated tax payments come from proper tax planning. There is nothing worse than the fear of the unknown since most human responses will be the worse case scenario. In other words, without proper data resulting from tax planning, people will make use of their own data… and it’ll be wrong, and will usually lead to a tax surprise. Another thing that is bad is having cash in the bank, but not knowing how much is yours and how much is Uncle Sam’s. Let’s take the mystery out of the unknown and do some tax planning and dial in those estimated tax payments.

We have an extensive questionnaire to get the creative juices flowing… which get pumped into our tax planning software-

  • What is your business income after expenses for this year? How about next year?
  • What is your expected salary or wage that will be paid to you and other shareholders?
  • What will be your Roth IRA contribution? Traditional IRA?
  • Will you or do you have a 401k? If so, what will be your contribution? Will there be a company or profit sharing contribution?
  • How much cash can you separate with for retirement planning? $20k? $50k? $100k?
  • Are you paying for health insurance premiums out of pocket? HSA?
  • Does your spouse have income? If so, what is the source and how much?
  • Any other income such as interest, dividends, capital gains, rental income, pension income, rental property sale, etc.?
  • What is your state of residency?
  • Are you or will you qualify as an Expatriate, Foreign Earned Income Exclusion?
  • What is your current business entity? LLC? Partnership? S Corp election?

And these questions are just jumping off points or conversation starters for tax planning. Your unique situation will take us down various roads, and more questions and answers will come up. Also.. and this is important.. we might not arrive at the answer you like or want. But it will be accurate nonetheless, and the sooner you have an answer to sooner you can begin warming up to its consequences (good or bad).

Tax Planning Service Levels

We have the following tax planning service levels.


Streamlined tax planning includes updates to W-2 wages, portfolio income, rental income and business income. We generally assume your medical expenses, property taxes, mortgage interest and charitable donations remain similar to the prior year. We also update dependents such as new children or those off Mom and Dad’s payroll.

This is included in all our Business Advisory Service (BAS) and Tax Patrol Service (TPS) engagements. For our BAS engagements, we will also use updated information to make shareholder salary recommendations.

For our tax-only engagements, streamlined tax planning is usually $400 to $600.


Advanced tax planning includes streamlined above, but also adds rental property sale, primary residence sale and changes in state residency. Expats (foreign earned income exclusion) also fall into the advanced tax planning category.

For our BAS and TPS engagements, advanced tax planning is typically a $300 to $400 add-on fee at time of tax plan preparation. For our tax-only engagements, advanced tax planning is generally $600 to $800. Yes, this sounds like a tax return preparation fee. A tax plan is a mock tax return for the future… a lot of time and effort goes into the accuracy.

Comprehensive (yeah baby!)

Comprehensive tax planning runs the gamut from business sale (installment or big fat check) to scenario-based decision making. For example, a multiple rental sale where you want to see how things look if you sold rental A and rental B, or rental A and rental C. Another example would be the specific tax benefits of a cost segregation analysis and implementation into your tax world through a tax plan.

Comprehensive tax planning is commonly done when there are pro-active decisions to be made as compared to our streamlined and advanced tax planning which are more “after the fact” or reactionary. Help me decide what to do versus here is what happened. These scenario based, comprehensive plans, can also straddle multiple years and take into account when to initiate the plan based on the variety of factors taken into consideration during the planning process.

Given the fluidity of comprehensive tax planning, our fee is variable at $250 per hour with a general retainer of $1,000 to $1,500.

Pass Through Entity Tax Election Planning

Way back in 2017, the Tax Cuts and Jobs Act was passed with a lot of cool tax deductions like corporate taxes going to 21% and the Section 199A qualified business income deduction. But life is one big equalizer, and Congress wanted to limit state and local taxes (SALT) to $10,000. This means either state income taxes or real estate taxes, or both, were severely muted. People in South Dakota owning a $600,000 house were like “what’s the big deal?!” People living in Oregon (second highest state income tax rate next to California) owning the same house were like “WTF, over?!”

pass-through entity tax deduction
Courtesy of Wolters Kluwer

So! States got creative, and created a state tax that was deducted on partnerships and S corporations (otherwise called pass-through entities, or PTE for short) resulting in lower federal taxable income. This tax was in turn credited to the small business owner resulting in lower state income taxes being reported on Schedule A. This is a workaround to the SALT limit, and nearly all states have enacted legislation to do just that.

The IRS took note to the workaround, but understood it was perfect legit. The IRS through Notice 2020-75 states,

“Certain jurisdictions described in section 164(b)(2) have enacted, or are contemplating the enactment of, tax laws that impose either a mandatory or elective entity-level income tax on partnerships and S corporations that do business in the jurisdiction or have income derived from or connected with sources within the jurisdiction. In certain instances, the jurisdiction’s tax law provides a corresponding or offsetting, owner-level tax benefit, such as a full or partial credit, deduction, or exclusion.”

The IRS continues by stating this practice is permitted under the notice until it can legislate this practice into regulations.

There are all kinds of rules, and not every business owner will benefit from the PTET or pass-through entity tax deduction. As such, the tax planning for determining the efficacy of using this tax deduction is challenging. WCG’s fee for this tax planning add-on service is generally $800 to $1,000, and at least $2,000 for complex situations (multiple owners spanning multiple states). If you are one of those complex situations, we will attempt to lock in a fee range; however, at times we must go old school and simply use retainers and hours spent (which both we and clients tend to loathe).

Alert! Calculating the approximate payment amount and providing general guidance is straightforward, and we typically do not charge for this service. The fees above are more about “should i do it?” or “what is my tax savings if I do?” or “we have 72 partners, and each want to know who what why” or similar nuttiness. Please bear with us since most states wrote these laws in crayon and in haste, and guidance is generally terrible.

Tax Reduction Strategies

One of our primary focuses at WCG is ensuring you are paying the least amount of taxes allowed by law. Some of our other primary focuses are helping you build wealth and leverage the most of your financial worlds for you and your family. However, these focuses or objectives are not isolated; they are very much related to each other and intertwined.

We can discuss several tax reduction strategies in the abstract such as borrowing against your unrealized gains, state deferrals and residency changes, 401k and retirement plans, cost segregation, adding spouse or children to payroll, 1031 exchanges, conservation easements, among other fun stuff.

However, if we want to see the actual tax savings or results in the form a tax plan, then oftentimes this will be considered comprehensive tax planning.

Tax Planning Consultation

Do you have questions on your tax consequence? Did you sell a rental property and are you not sure what you can spend? Are you concerned that your estimated tax payments are incorrect given a bump in net business income? Let’s chat!



    Our consultation fee is $250 for 40 minutes with a Partner or an experienced Tax Manager. If we decide to press forward with a Business Advisory or Tax Patrol Services engagement, we will credit the consultation fee towards those services. If you don’t need convincing and already want our services and you simply have some housekeeping questions, we answer those at no charge. Charging a consult fee to tell you how great we are is not cool.


    Consultations are scheduled on weekdays during the work day. Yes, we can accommodate other days and after-hours, but those are reluctantly agreed to after some eye-rolling and complaining. Additionally, our schedules are more compressed during January through April. Consultations are designed to


    • Provide instruction and offer solid guidance on most tax matters.

    • Determine if we are a good fit for each other, and how an engagement with our team looks.

    • Refer you to other professionals should WCG be unable to help directly.

    Shockingly we actually return all consultation requests via email or perhaps a phone call (if the moment strikes us). No black holes here!

    WCG is your tax planning expert and we will work with you to land on tax neutrality next tax season!