March 6th,2025 (We currently have a partial recording for this session. We are working with Zoom to have the full recording restored)
The session, led by Veronica Herrera, focused on business tax filings and strategies for clients, covering key tax planning challenges and solutions. Haley Nguyen highlighted common misconceptions about filing extensions, while participants discussed upcoming deadlines. Veronica reviewed a Schedule C client case with a net profit of $90,000, exploring strategies such as utilizing a 529 savings plan, hiring children for tax deductions, and transitioning to an S Corporation. The group analyzed the client’s 40% effective tax rate, discussing the implications of self-employment income, health insurance, and retirement contributions. Veronica also examined the Augusta rule, gathering insights on its use for sole proprietors versus LLCs, with participants indicating they generally do not use it for their clients. She emphasized proper documentation requirements and walked through the process for submitting case studies through the Tax Lab, stressing the importance of redacting sensitive information and utilizing available resources. The session concluded with Veronica encouraging proactive client tax planning and sharing updates on improvements to the redaction process.
March 13th, 2025
This week’s Tax Lab session focused on analyzing a tax return for a couple in Texas who own an S Corporation, rental properties, and receive oil and gas royalties. Veronica walked through the tax return, identifying potential tax planning opportunities such as adjusting reasonable compensation, considering cost segregation, and applying the real estate professional status for maximizing deductions. A key discussion revolved around material participation rules, ensuring taxpayers meet the requirements to claim losses. The session also covered tax-saving strategies suggested by the system, including backdoor Roth conversions, accountable plans, self-employed health insurance deductions, and pre-tax employer benefit reviews. Towards the end, there was an open discussion on pricing models for tax services, transitioning to tax planning, and the importance of selecting a niche to increase revenue and efficiency. Attendees shared their experiences with pricing, workload management, and strategies for shifting towards advisory services rather than compliance-heavy work.
March 20th, 2025
In this Tax Lab, Veronica Herrera led a discussion on managing tax season workload, client vetting, and advanced tax planning strategies. Courtney Holness shared her experience filing Form 3115 for missed depreciation and clarified that the adjustment belongs under “Other Expenses” on Schedule E. She and Veronica emphasized the importance of updating SOPs, setting expectations with clients early (e.g., requiring extensions), and not onboarding new clients during busy season. Jesse Gleaton discussed challenges with redacting large returns and pricing tax plans, and Veronica advised redacting only essential filing pages and charging upfront research fees for time-intensive planning like business sales. They also explored when a C corp structure is beneficial—highlighting the C Corp Benefit Score, QBI limitations, and fringe benefits—and touched on strategies for capital gains planning, including installment sales and deferred sales trusts, especially in high-income or business sale scenarios.
March 27th, 2025
In this Tax Lab, Jackie Meyer stepped in for Veronica and worked closely with Courtney Holness to evaluate a complex Roth conversion strategy for a client with $1.2M in self-directed real estate within a Solo 401(k). The client, nearing retirement, wants to convert the account to a Roth over eight years to avoid RMDs and benefit from tax-free growth. Courtney and Jackie explored ways to model the potential tax savings and future value using various calculators, ultimately deciding that a simplified ROI estimate and flat planning fee (e.g., $3,000) were appropriate due to the high complexity and time involved. The team discussed using a general strategy placeholder in TaxPlanIQ to present the estimated ROI and emphasized that clients like this may require value-based pricing for both planning and implementation. Key considerations included whether to purchase future properties inside the Roth, the inapplicability of cost segregation within tax-free accounts, and the limitations of QCDs in this scenario. Tom Suvansri contributed insights on appraisal timing and strategy sequencing. Jackie concluded with updates about new TaxPlanIQ features, including upcoming automated redaction of tax returns.