Purpose
Take a business client's fact pattern and systematically surface the tax planning opportunities that actually apply to them — screened for eligibility, sized by estimated benefit, and ranked by priority — so a tax advisor walks into the planning meeting with a defensible roadmap instead of a blank page. Solves the problem of missed opportunities buried under compliance work and inconsistent planning across a book of clients.
When to Use
Invoke this skill when the user asks to:
- Identify tax planning opportunities for a specific business client
- Prepare a planning agenda or roadmap ahead of a client meeting
- Run a year-end tax planning scan before December 31
- Review whether a client's entity structure is still tax-optimal
- Surface credits, incentives, or deferral strategies the client may be leaving on the table
- Build a proactive advisory deliverable from a client's financials and facts
Inputs Required
Before starting, collect:
- Entity type: C-corp, S-corp, partnership/LLC, sole proprietor, or multi-entity structure
- Industry and activities: What the business does, including any R&D, manufacturing, real estate, or export activity
- Revenue and profitability: Approximate gross revenue, taxable income, and margin
- Owner profile: Number of owners, compensation approach, personal income level, filing state
- State/local footprint: States where the business operates, has employees, or has nexus
- Current-year facts: Major asset purchases, hiring, expansion, losses, or one-time events
- Planning goals and horizon: Reduce current-year tax, defer, prepare for a sale/exit, succession, or general optimization
If income figures or state footprint are missing, note the assumption used and flag which opportunities depend on confirming them.
Instructions
Scan the Fact Pattern Across 8 Opportunity Categories
For each opportunity surfaced, provide:
- Opportunity name and the strategy in one sentence
- Eligibility read: Likely qualifies / May qualify — needs confirmation / Unlikely — with the deciding factor
- Estimated benefit magnitude: Order-of-magnitude annual or one-time impact (e.g., "$15K–40K/yr," "material," "modest") with the driver
- What to confirm: The specific fact, document, or threshold that determines applicability
Category 1 — Entity Structure & Classification Whether the current entity form and tax elections minimize combined entity-plus-owner tax.
- S-corp election to reduce SE/payroll tax on pass-through income (screen reasonable-comp exposure)
- C-corp vs. pass-through modeling at current rates and QBI status
- Check-the-box elections and disregarded entity restructuring
- Multi-entity separation (operating co / holding co / IP co) for liability and tax layering
- QBI (§199A) optimization — aggregation, W-2 wage and UBIA limits, SSTB analysis
Category 2 — Credits & Incentives (Federal) Activity-based credits the business may be generating without claiming.
- R&D tax credit (§41) — screen for qualified research activities, four-part test, payroll-offset election for startups
- Work Opportunity Tax Credit for targeted-group hires
- Energy credits (§48/§179D/§45L) for property, buildings, or improvements
- Employer credits — paid family leave, retirement plan startup, dependent care
- Fuel, clean vehicle, and industry-specific credits tied to the activities described
Category 3 — Deferral & Timing Strategies that shift income out or accelerate deductions into the optimal year.
- Accounting method review — cash vs. accrual eligibility (§448 gross receipts test), method changes via Form 3115
- Installment sales and deferred gain structuring
- Qualified Opportunity Zone deferral for capital gains
- Retirement contribution timing and prior-year funding windows
- Prepaid expense and year-end income/deduction acceleration
Category 4 — Deductions & Cost Recovery Maximizing the deduction of capital and operating outlays.
- Bonus depreciation and §179 expensing on current-year asset purchases (screen phase-down)
- Cost segregation study for real property to accelerate depreciation
- §163(j) business interest limitation planning and the small-business exemption
- Accountable plan and home-office reimbursement structuring
- De minimis safe harbor and repair-vs-capitalization (tangible property regs)
Category 5 — Retirement & Owner Compensation Owner-level tax reduction through qualified plans and compensation design.
- Solo 401(k), SEP, or defined benefit / cash balance plan for high-income owners
- Reasonable compensation calibration for S-corp owners
- Deferred compensation and §83(b) for equity grants
- HSA and health plan structuring
- Roth conversion timing tied to low-income or NOL years
Category 6 — State & Local (SALT) Multistate and jurisdiction-specific savings and exposure reduction.
- Pass-through entity (PTET) elections to work around the SALT cap
- State-specific credits and incentives (jobs, investment, enterprise zones, film, hiring)
- Nexus review and apportionment optimization
- Sales/use tax exposure and voluntary disclosure opportunities
- Local property tax abatements and negotiated development incentives
Category 7 — Exit & Succession Structuring the eventual transfer or sale for tax efficiency.
- QSBS (§1202) gain exclusion eligibility — screen the five-year hold, C-corp, and gross-asset tests
- Asset vs. stock sale modeling and §338(h)(10)/§336(e) elections
- Installment or earnout structuring to spread gain
- ESOP feasibility for owner liquidity and deduction
- Basis planning ahead of a sale event
Category 8 — Family & Estate Integration Coordinating business tax planning with the owner's wealth transfer.
- Family employment and income shifting to lower brackets
- Gifting business interests using valuation discounts (minority/marketability)
- Grantor trust and estate freeze structures (GRAT, IDGT)
- Charitable strategies — DAF, appreciated stock, CRT
- Annual exclusion and lifetime exemption utilization tied to the entity
Then Rank and Prioritize
After scanning, produce a Top Opportunities ranking:
- Order by expected benefit weighted against implementation effort and certainty
- Flag any time-sensitive items (year-end deadlines, election windows, phase-downs)
- Note dependencies where one strategy must precede another
- Assign each a next step: confirm a fact, run a model, order a study, or schedule the election
Output Format
- Structure: 8 category sections listing applicable opportunities with the four-part detail per item; a ranked Top Opportunities list; a time-sensitive callout
- Length: 1,000–1,400 words
- Format: Structured document — grouped bullets under each category, ranked numbered list for priorities
- Sections: Fact-pattern summary and assumptions → 8 opportunity categories → Top Opportunities ranking → Time-sensitive items → Recommended next steps
- Tone: Tax planning manager — precise, citation-aware (reference code sections), calibrated on eligibility rather than overselling
Quality Checklist
Before delivering output, verify:
- [ ] Every surfaced opportunity has an eligibility read, benefit magnitude, and a specific fact to confirm
- [ ] Opportunities clearly do NOT include strategies the entity type makes inapplicable (e.g., no QSBS for a partnership, no S-corp reasonable-comp issue for a C-corp)
- [ ] All 8 categories are addressed — irrelevant ones are marked "no material opportunity identified" rather than omitted silently
- [ ] The Top Opportunities ranking is ordered by benefit-vs-effort, not listed arbitrarily
- [ ] Time-sensitive items with hard deadlines or election windows are flagged separately
- [ ] Relevant code sections are cited where a strategy is named
Notes
- This is an identification and prioritization tool, not tax advice or a substitute for modeling — every "may qualify" item should route to a calculation or a documented eligibility determination before the client acts.
- Entity type is the single most powerful filter — apply it first to suppress inapplicable strategies and keep the output credible.
- The highest-yield scans usually surface an overlooked credit (R&D, PTET) or a stale entity structure; check those two areas hardest when the client has been with the same advisor for years.
- For year-end scans, lead with deferral, cost recovery, and election-window items; for entity reviews, lead with structure and SALT; for exit prep, lead with QSBS and sale structuring.
How to use this skill
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