KPMG vs AE Tax Advisors for High-Income Tax Planning
KPMG and AE Tax Advisors compared for high-income individuals and business owners: engagement scale, service model, cost segregation and real estate planning, pricing, and practical fit.
The Short Version
KPMG is one of the Big Four, built to serve multinational corporations, funds, and very large private wealth structures.
AE Tax Advisors serves individual business owners, real estate investors, and high-income professionals with published pricing.
For most high earners, even at seven-figure income, a Big Four engagement is not the right instrument. The minimums and the service model are calibrated to a much larger scale of problem.
Who KPMG Is
KPMG is a global professional services network providing audit, tax, and advisory to some of the largest organizations in the world. Its tax practice covers international structuring, transfer pricing, mergers and acquisitions, state and local tax across large footprints, and a private client practice for substantial family wealth.
The technical capability is not in question. For a business with cross-border operations, a fund with complex partner allocations, or a family office managing generational structures across jurisdictions, the depth is unmatched by smaller firms and the work needs that depth.
The mismatch for most individual clients is one of scale. Big Four engagement economics are built around large mandates, work is delivered through layered teams, and the individual real estate strategies that drive results for a physician with two short-term rentals are not what the practice is organized to deliver.
Who AE Tax Advisors Is
AE Tax Advisors is a strategic tax advisory firm based in Billings, Montana, working with clients nationwide. The practice centers on business owners, real estate investors, and high-income professionals who have outgrown compliance-only accounting.
The model is deliberately different from a study-only provider. A cost segregation study is one deliverable inside a broader engagement that also covers the passive activity analysis under IRC Section 469, material participation documentation, Form 3115 catch-up filings, entity structuring, reasonable compensation, retirement plan design, and the tax returns themselves.
Pricing is published rather than quoted case by case: $7,800 for the strategic advisory engagement, $2,500 per amended year, $1,500 and up for entity returns, $1,000 and up for individual returns, and $1 per square foot with a $2,000 minimum for cost segregation studies.
Side-by-Side Comparison
| KPMG | AE Tax Advisors | |
|---|---|---|
| Firm scale | Global Big Four network | Focused advisory practice |
| International and transfer pricing | Extensive | Referred out |
| Fund and partnership structuring at scale | Extensive | Owner-level structures |
| Family office and generational planning | ✔ Yes | Coordinated with counsel |
| Cost segregation for a single property | Not the core market | Core service |
| Short-term rental material participation | Not the core market | Core focus |
| Typical pricing model | Quoted, substantial minimums | Published fixed fees |
| Typical client | Multinationals, funds, large family wealth | Owners, investors, high-income professionals |
| Direct access to the strategist | Through a layered team | Direct |
| Three-year lookback as standard | ✘ No | ✔ Yes |
| Prior-year amendment recovery | Available | Standard in every engagement |
| Published pricing | ✘ No | ✔ Yes |
Where KPMG Is Strong
- Unmatched depth on international and cross-border structuring
- Capacity for the largest and most complex mandates
- Global footprint with local expertise in most jurisdictions
- Recognized name where institutional credibility is required
Where the model has limits
- Engagement minimums exceed what most individual clients need
- Individual real estate strategy is not the practice focus
- Layered team delivery rather than direct advisor access
Which One Should You Choose?
Choose KPMG if you have cross-border operations, a fund with complex allocations, or family wealth structures spanning jurisdictions where the cost of getting it wrong justifies Big Four depth.
Choose AE Tax Advisors if you are a high earner or owner whose plan turns on entity structure, depreciation strategy, retirement plan design, and passive activity treatment rather than international structuring.
These are not mutually exclusive. Plenty of clients use a specialist for the engineering work on a complex asset and AE Tax Advisors for the strategy, the filings, and the return. We are glad to work from someone else's study.
Why Clients Choose AE Tax Advisors
- The deduction is analyzed before the study is sold. A large depreciation deduction is worth nothing if the passive activity loss rules suspend it. Every engagement models material participation, basis, at-risk, and the excess business loss limitation before a study is recommended.
- The filing is handled, not handed off. Form 3115 with its Section 481(a) adjustment, the duplicate Ogden copy, partial disposition elections, and the depreciation schedules all get prepared in-house.
- Prior years get reviewed. Every engagement opens with a three-year lookback. Recovering overpaid tax from returns already filed frequently covers a meaningful part of the engagement fee.
- Pricing is published. You can compare the cost against the modeled benefit before committing.
How to Evaluate Any Provider, Including Us
Whichever firm you engage, these six questions separate a defensible engagement from a report that will not hold up. Ask them of KPMG, ask them of us, and compare the answers rather than the marketing.
- Ask which method the study uses. There are several accepted approaches and they are not equivalent. The IRS Cost Segregation Audit Techniques Guide treats the detailed engineering approach, using construction documents and a site inspection, as the most reliable. Ask directly whether someone will inspect the property and review the drawings, or whether the allocation is modeled from photographs and public data. Both are permissible. Only one is easy to defend.
- Ask who runs the passive activity analysis. This is the question that decides whether the deduction is worth anything this year. A study can produce a $400,000 first-year deduction that is entirely suspended under IRC Section 469. Ask who is confirming that you materially participate, that your average period of customer use is what you believe, and that you clear the basis, at-risk, and excess business loss limits. If the answer is nobody, the study is a number on paper.
- Ask who prepares the Form 3115. If you have owned the property for more than a year without a study, the catch-up runs through a change in accounting method rather than an amended return. That means a Form 3115, a Section 481(a) adjustment, a duplicate copy filed with the IRS in Ogden, and often a late partial disposition election. Study providers generally do not prepare it. Confirm who will.
- Ask what happens if the study is examined. Audit support means different things. Ask whether the provider will produce the workpapers, respond to an information document request, and stand behind the allocation, and whether that is included or billed separately. Ask how many of their studies have been examined and what happened.
- Ask for the exit math, not just the year-one number. Accelerated depreciation on personal property is recaptured as ordinary income under Section 1245 when you sell. If you deduct at 35% and recapture at 37%, you have borrowed from the IRS at a negative spread. A provider who only shows you the first-year deduction is showing you half the picture. Ask for the modeled outcome over your actual holding period, including whether a 1031 exchange or a step-up at death is part of the plan.
- Compare total cost, not study cost. A cheaper study plus a CPA who does not understand Section 469 is not cheaper. Add up the study, the return preparation, the Form 3115, and the planning work, then weigh that against the modeled after-tax benefit over your holding period. That is the only comparison that means anything.
Frequently Asked Questions
Is AE Tax Advisors better than KPMG?
For a multinational or a large fund, no, and it would be dishonest to claim otherwise. For an individual business owner or real estate investor, AE Tax Advisors is built for exactly that work while KPMG is not, and the engagement economics reflect that difference.
Do I need a Big Four firm if I earn over $1 million?
Income alone rarely justifies it. What justifies Big Four engagement is structural complexity: cross-border operations, institutional investors, fund structures, or transactions of significant size. A high W-2 income with real estate and a business is squarely in the range a focused advisory firm handles.
Does KPMG do cost segregation?
Big Four firms have fixed asset and specialty tax capability, but a single property study is not the market they are structured around. For an individual property, a specialist provider or a focused advisory firm is generally both more economical and more responsive.
What if my business grows into needing a large firm?
That transition is normal and we plan for it. Where a client approaches the scale that requires assurance work or international structuring, we coordinate the handoff and continue on the strategy side where it is useful.
Can I use a specialist firm for the study and AE Tax Advisors for the strategy?
Yes, and that is a common arrangement on larger or unusual properties. We regularly work from a third-party engineering report, prepare the Form 3115 and depreciation schedules, run the passive activity analysis, and file the returns. The study and the strategy do not have to come from the same place.
Does a cheaper cost segregation study mean a worse outcome?
Not necessarily, but the method matters more than the price. The IRS Cost Segregation Audit Techniques Guide identifies the detailed engineering approach as the most reliable. A study without site work or construction document review is the first thing challenged on examination, particularly on specialty systems and site improvements.
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Talk Through Your Situation
Every situation turns on its own facts. Schedule a discovery call and we will walk through what applies to you, what it is worth, and what it would take to put it in place.