What a $7,800 Tax Advisory Engagement Includes
The deliverables, the sequence, and what sits outside the fee.
A tax advisory engagement is a project rather than a recurring compliance service. Ours is $7,800, quoted flat in writing before work begins, and covers the analysis and implementation planning across entity structure, retirement plan design, depreciation strategy, state elections, and a three-year lookback for recoverable amounts. Return preparation and cost segregation studies are priced separately.
Phase One: Baseline and Lookback
The engagement opens with the last three years of business and personal returns read together, the current effective rate calculated rather than estimated, and the entity structure and its elections confirmed against the governing documents.
The lookback runs in the same pass, identifying depreciation never claimed, credits missed, elections available and never made, and structural errors such as an S election filed without a conforming operating agreement. Recoverable amounts are quantified with the route to recover each: an amended return, or a Form 3115 catch-up in the current year.
The deliverable is a written baseline with the recoverable amounts identified and a recommendation on which are worth pursuing.
Phase Two: Structure and Plan Design
The analysis proper. Entity structure is modeled against alternatives over several years rather than one, because a structure that wins in the first year can lose over five. Where an S election is in place or recommended, a reasonable compensation analysis is produced with market data and the derivation documented.
Retirement plan design is modeled against the employee census, comparing a solo 401(k) or safe harbor 401(k) alone against a cash balance plan layered on top, with the employee cost of each design quantified. Depreciation strategy is analyzed including whether any resulting loss will actually be usable under the passive activity rules, which determines whether a study is worth commissioning at all. State elections are reviewed, including multi-state apportionment where relevant.
These are modeled together rather than in isolation, because compensation determines plan capacity, plan contributions change the Section 199A position, and depreciation changes it again.
Phase Three: The Plan and Implementation Calendar
The output is a written tax plan setting out each recommended strategy, the quantified annual benefit, the cost of implementing it, and the steps required, with a calendar of deadlines: election dates, plan installation deadlines, and the dates estimated payments must change.
Implementation support is included: coordinating with the actuary and third-party administrator on plan installation, preparing or reviewing the election filings, and providing the documentation templates for the compensation file, accountable plan, and grouping election where applicable.
What Is Priced Separately
Stated plainly so the total is predictable:
- Cost segregation studies: $1 per square foot, subject to a $2,000 minimum.
- Entity tax returns: $1,500 each.
- Personal tax returns: $1,000.
- Amended returns: $2,500 each.
Amended returns are separately priced because whether to file them is a decision that follows from the lookback rather than a given. The engagement identifies what is recoverable and what it is worth; you decide which to pursue.
What the Engagement Does Not Do
Worth stating directly. It is not a return preparation engagement, though preparation is available separately. It is not investment advice or insurance placement, and we do not receive commissions on any product recommended, which is why the retirement plan analysis can be neutral about the provider.
It does not include audit representation, though the documentation the engagement produces is what defends the positions taken. And it does not manufacture strategies where the facts do not support them. If the review identifies little available, we say so during the initial assessment, before an engagement letter is issued.
Whether the Fee Is Justified
The test is the ratio to recurring savings. At $500,000 to $1,000,000 of profit with none of the main strategies in place, $40,000 to $80,000 in annual recurring savings is realistic, which returns five to ten times the fee in the first year and more thereafter, because the structures persist.
Where an owner already has a properly sized plan, a current entity structure, and their state elections made, the available savings may be small. That is established in the initial assessment rather than after invoicing, and it is the reason the assessment happens before the engagement letter.
Key Takeaways
- The fee is flat, quoted in writing before work begins, and covers analysis and implementation planning.
- The three-year lookback runs first and often recovers more than the first year of forward savings.
- Strategies are modeled together because each changes the inputs to the others.
- Cost segregation, return preparation, and amended returns are priced separately and stated up front.
- No commissions are received on recommended products, so the plan analysis stays neutral.
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Frequently Asked Questions
What does a tax advisory engagement cost?
Ours is $7,800, quoted flat in writing before work begins, with split payment available. Cost segregation studies are $1 per square foot subject to a $2,000 minimum, entity returns are $1,500, personal returns are $1,000, and amended returns are $2,500 each.
How long does the engagement take?
Typically several weeks from start to delivered plan, depending on how quickly documents arrive. Implementation extends beyond that, since plan installation and elections follow their own deadlines, which are set out in the calendar delivered with the plan.
Do you prepare returns as well?
Yes, priced separately at $1,500 per entity return and $1,000 for a personal return. Many clients keep their existing preparer and use us only for planning, which works well when the division of responsibility is explicit.
What if the review finds nothing worth doing?
We say so during the initial assessment, before an engagement letter is issued. An owner with a properly sized retirement plan, a current entity structure, and their state elections already made may have little available, and an engagement in that situation would not be worth its fee.
Do you receive commissions on the products you recommend?
No. We are paid by the client, not by product providers, which is why the retirement plan analysis can be neutral about which provider or design is used. Fee arrangements that depend on product placement create an incentive we prefer not to have.
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