Jenny, I’ve Got Your Numbers!

Keith and I launched TaxCoach almost exactly 10 year ago — on May 26, 2005, to be precise. We’ve always prided ourselves on bringing you a different kind of tax planning program, focusing on plain-English concepts and strategies rather than spreadsheets and projections.

TaxCoach has always let you offer clients “ballpark savings estimates” to help them understand which strategies can be most valuable. These estimates generally take the form of ranges. For example establishing an S corporation offers “Potential Tax Savings” of “up to $153 for every $1,000 no longer subject to self-employment tax.” Establishing a medical expense reimbursement plan might offer “up to $288 in income and employment tax savings for every $1,000 in deductible expenses.”

Those ballpark estimates have always given clients useful information to help decide which strategies to implement first, without bogging them down in unnecessary detail or misleading them with a false sense of precision.

Still, though, many of you have asked for more specific savings estimates. Many of you would like to include a “grand total” in your reports, to impress clients and to communicate your value.

Well guess what — now you can incorporate specific savings estimates directly into your TaxCoach reports, without having to resort to an outside program like Lacerte Tax Planner or BNA Tax Planner. We’re pretty excited about it, and we think you’ll be excited too.

When you open a client file in TaxCoach, you’re used to seeing seven tabs across the top of your screen: “Contact,” “Family,” “Employment,” “Business,” Investments,” “Reports,” “Done/Home,” and “Save.” But now when you open a file, you’ll see a new tab, just to the right of “Reports.” It’s called “Estimates,” and here is where you’ll enter or calculate those numbers.

When you open the “Estimates” tab, you’ll see a list of all the TaxCoach strategy modules, broken down by section in that section. You’ll instantly see which modules are checked for inclusion in your client’s report, and which offer the chance to include specific savings estimates.

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If you have a specific estimate you’ve already calculated, you can enter it directly into the system using the “override” column.

Or, if you’d like TaxCoach to calculate the savings for you, check the “Calculate” button. You’ll see one or more input boxes appear to the right. Let’s say you want TaxCoach to calculate savings from a medical expense reimbursement plan. Enter the amount of medical expenses you expect to deduct under the plan. The system will then use your client’s income tax rate (and SE tax rate, if the client is self-employed) to calculate the savings. If you’d like TaxCoach to calculate the savings from establishing an S corporation, you’ll enter the client’s current self-employment tax bill and the stated salary you would pay in an S corp. The system will then calculate the FICA tax payable on that stated salary and subtract it from the SE tax to report the savings.

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33 of TaxCoach’s modules will let you enter your own savings estimates. 28 of them will also let you enter numbers for the system to calculate those savings. If you don’t take advantage of either of those opportunities, TaxCoach will default to the same “ballpark” potential savings it has always presented.

Now take a look at the Summary Report. You’ll see that for some modules, the savings estimates start with “Potential Savings: …” Those are the old “ballpark” ranges, and they’ll continue to appear wherever they previously appeared.

However, in some case, they’ll read “Estimated Savings: …” These are the new direct inputs or calculated savings.

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Finally, the system will total all of the “estimated savings” and present that total at the end of the Summary Report — in a nice, oversized 14-point type, same as the category headings. Want to impress a prospect with your value? That’ll do the trick nicely, without pages of spreadsheets that most of them won’t read or understand anyway!

Of course, you’re always free to use your tax prep software’s “Planner” module, or a standalone tax-projection program, to illustrate specific scenarios or greater detail. But for the main TaxCoach business of demonstrating your value to clients and helping them understand how valuable new concepts and strategies can be, we’re confident you’ll find the new feature to be a powerful tool.

We’ll be hosting a special webinar on Tuesday, May 12, at 2PM Eastern (11AM Pacific) to walk through the new feature. We’ll “play with the numbers” right in front of you to illustrate as specifically as possible how to use it, as well as how to put it to work in your practice.

Take a look at the new estimates and let us know what you think! We intentionally rolled out this feature as a basic “1.0” version. We’ve always gotten our best suggestions from our members who are using the system in their business, and we expect the same inspiration here. How helpful is this feature? What works best? What more would you like to see? What ideas, comments, and suggestions do you have? We’re looking forward to your feedback, and we’re looking forward to hearing how we can make them even more useful.