Preparation versus planning
By the time most people sit down with a tax preparer, the year is over. The income is earned, the money is spent, and almost every decision that shaped the bill is locked in. A good preparer can make sure nothing is missed. They cannot go back and change what you did in June.
Planning is the opposite. It happens during the year, while there is still time to act:
- Setting your S corp salary at a number you can defend
- Deciding whether to buy the equipment in December or January
- Timing a property sale, or setting up a cost segregation study before year end
- Sizing your estimated payments so you are not writing a surprise check in April
- Picking the retirement plan that fits, before its deadline passes
Most of what saves real money on a tax return was decided months before the return was prepared.
What a planning year looks like
Quarterly tax planning gives you four planning meetings, a running tax projection, and priority access to the team. Roughly, the year runs like this:
- Spring: look back. Once last year's return is filed, we review what drove the number and set the plan for this year.
- Early summer: first projection. We project the full year from your actual numbers so far and set your estimated payments.
- Early fall: adjust. Business years rarely go to plan. We update the projection, check your salary and distributions, and flag decisions coming up.
- Q4: year end moves. The meeting that matters most. Equipment timing, retirement contributions, bonuses, charitable giving, real estate moves. Everything that has a December 31 deadline.
You leave each meeting with a short written plan: what we are doing, who is doing it, and by when.
What it costs
| Option | Price |
|---|---|
| Quarterly tax planning, individual: four meetings, projections and a written plan | $2,000 / year |
| Quarterly tax planning, business: the same, covering the business and its owners | $3,000 / year |
| One off strategy call with Sargis | $150 / 30 min |
| Intro call | Free |
Planning can be added to any tax preparation engagement from the estimator on that page. It is already built into the Foundation, Controller and CFO packages of our outsourced accounting.
The honest test: if planning will not save you more than it costs, we will tell you on the intro call.
The moves we look at most
Entity structure and S corp salary
An S corp election can cut self employment tax, but only if the owner is paid a reasonable salary through real payroll. Too low invites IRS attention. Too high gives away the savings. We set the number from your actual role and profit, and revisit it in the fall. More on S corp conversions.
Equipment and vehicle timing
Equipment has to be placed in service by December 31 to count this year, not just ordered or paid for. Whether you even want the deduction this year depends on whether next year will be bigger. That is a projection question, not a guess.
Estimated taxes
Business owners and investors do not have enough withheld. We size your quarterly payments against the safe harbor rules, so you avoid the underpayment penalty without overpaying the IRS all year.
Real estate
Depreciation, cost segregation, the short term rental rules and real estate professional status can shelter a lot of income, but only with the right facts and records in place during the year. See real estate tax strategy.
State level moves
North Carolina and South Carolina both let pass-through businesses elect to pay state income tax at the entity level, which can turn a capped personal deduction into a business deduction. Whether it helps depends on the owners, the states involved and the numbers. For households split across the state line, residency and credits are their own topic. See NC and SC dual-state taxes.
Who this is for
Planning pays for itself most often for:
- Business owners netting enough profit that structure and salary matter
- Real estate investors buying, selling or holding several properties
- High earning W-2 households with rental or side business income
- Anyone who wrote a check in April they did not see coming
Most of our planning clients are in the Charlotte area, but the work is virtual and we plan for clients across the country.
Questions we get asked
What is the difference between tax planning and tax preparation?
Tax preparation reports what already happened and files the return. Tax planning happens during the year and changes the decisions that drive the bill, such as salary, timing of purchases, retirement contributions and estimated payments.
How much does tax planning cost?
Quarterly tax planning is $2,000 a year for an individual and $3,000 a year for a business. A one off 30 minute strategy call with Sargis is $150. The intro call is free.
When is the best time to start tax planning?
Now, wherever you are in the year. The earlier you start, the more options you have. The fourth quarter matters most, because many moves have a December 31 deadline.
Do I need tax planning if I already have a CPA?
Only if your current CPA is not doing it. If you only hear from your CPA between February and April, you are getting preparation, not planning. We are happy to review your last return and tell you whether there is anything to gain.