TaxCoach Briefs:    January 18, 2007

Volume 2, Number 3

In this week's issue:

* Marketing Minute: This Is Too Easy!
* Marketing Opportunity: Co-Host a Realtor Seminar
* Content Update: 'White Paper' Articles
* Subscriber Q&A: Tax Marketing Timing, Schedule C Income

TaxCoach Briefs archives...

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TAX STRATEGIES FOR MEDICAL EXPENSES
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Are you showing your self-employed clients how to use a Section 105 Medical Expense Reimbursement Plan to deduct family medical costs as business expenses? If not, they may be leaving thousands in tax dollars on the table. And you may be losing even more in referrals! Your TaxCoach subscription includes template plan documents, enrollment and reimbursement forms, and even a 'due diligence' kit with IRS guidance. If you're a subscriber, you'll find it in the 'Forms and Templates' section. If not, visit www.taxcoachsoftware.com for your 30-day trial.

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MARKETING MINUTE
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THIS IS TOO EASY!

You've all heard the joke:

A guy calls a plumber to fix a leaky toilet. The plumber shows up, pulls out a wrench, bangs on the toilet, and it's fixed. The plumber gives the guy a bill for $150.

The guys says 'that's a lot of money for hitting a toilet with a wrench!'

The plumber says 'it's five bucks for hitting the toilet with the wrench, and 145 bucks for knowing where to hit it!'

I felt a little like that last week. A friend referred me to his hair stylist, who owns and operates his own shop. I don't know anything about cutting hair, other than I need to cut mine more often. But we sat down at a local Starbucks on Friday morning, talked about his business for 20 minutes or so, and he handed me his corporate tax return.

It took me about 3 minutes to discover how he could save $12,000 in taxes in 2007 and $5,000 or more every year going forward. He's currently operating as a C-corp, and he's paying himself enough salary to create net operating losses every year. He's got about $45,000 in loss carryforwards now. I recommended he cut his salary in half for this year, to let the corporation realize a profit to soak up the NOLs. Then I recommended converting to an S-corp. This would let him lower his salary in future years to the industry standard that he had identified for stylists in his position, thereby cutting his employment tax liability.

I charged him $600, up front, to prepare a TaxCoach report and separate written recommendations. I was almost embarassed to do it. But of course he got great value. I could have charged twice as much and he wouldn't have blinked an eye.

Where's the lesson?

1. You may take your knowledge and expertise for granted. But your clients don't. You've studied hard for your credentials, and worked even harder for your experience. You may not always be able to 'wow' them them like I did. (And really, it was his circumstances, not just my expertise, that made it possible.) But don't be afraid to take credit for the work you do and the value you create. Even if it seems too easy. Remember, TaxCoach is designed to make you look good.

2. You may think you never would have let the NOLs accumulate the way they did, or let the client pay FICA on salary exceeding his income from the business. But we all fall into patterns with clients, and we start to take their circumstances for granted. And my new client described his relationship with his previous accountant as 'stale.' TaxCoach gives you a reason to sit down with your clients and take a fresh look.

Along those lines, I spent some time this morning on a consultation with a new subscriber looking to boost his tax-planning business and year-round revenue. He asked if it would make sense to prepare TaxCoach Plan Summaries to give to his clients along with their returns. I told him that we had recommended it, frequently, both here and in the Marketing Guide. We also discussed how he could use them to target referral clients. Here's a subscriber whose relationships won't get stale!

Tax season can be a long marathon. It can be tempting to push off 'tax planning' as a distraction from our 'core' tax preparation business. But that would be a mistake. Tax planning adds extra value to our service, even now, in the middle of our season. And tax savings make our clients happier than just about anything else we deliver. Never pass up an opportunity to delight a client with those sorts of savings.

Especially if it's just too easy!

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MARKETING OPPORTUNITY
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CO-HOST A REALTOR SEMINAR

Part of my business includes conducting seminars for real estate agents across the country. My sponsor, Geoff Zimpfer of Profit Pillars Marketing, finds loan officers looking to boost their realtor referral business to host the seminars. I fly in to speak and sell my Instant Tax Relief system. There are always agents asking if I can give them the sort of proactive tax planning I discuss in the presentation.

The loan officers hosting the seminar generally look for co-sponsors. In the past, these have included title companies, insurance agents, attorneys, and home inspectors. Now they can include you.

What if you could literally 'plug in' to a proven, client-capturing system, with no heavy lifting, and instantly reach a target group of self-employed people who realize their tax preparer is missing the boat on thousands in savings? What if you could quickly and easily grow your business for a small investment of time and money?

Partnering with the right mortgage professional also gives you the opportunity to work with their client database and solve their clients' problems.

We're currently promoting the seminars through www.loantoolbox.com, an online community of mortgage loan originators. Visit Geoff's web site at www.edlyontaxevent.com. Better yet, if you work with a local mortgage professional, send them to www.edlyontaxevent.com for complete details!

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CONTENT UPDATE
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'WHITE PAPER' ARTICLES

The TaxCoach Playbook includes several 'white paper' articles, which discuss some popular tax saving concepts in general terms. You can show them on your website or distribute them on paper - just one more way to add value for your clients and solidify your relationship.

We've recently updated several of those texts for 2007. If you post or print them, rather than link to them dynamically, you'll want to refresh your copies. You'll find them in the Playbook, available on the left side of the Home Page, within the TaxCoach system. If you'd like to see new topics, let us know!

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DIRECT MAIL CONTEST
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Don't forget to fax us your tax-season direct mail promotion by January 31. We'll be selecting the best submission, and dissecting it here in the Briefs. The winner gets a free month's subscription to TaxCoach.

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2007 PLANNING LETTER
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Just a reminder about the 2007 Planning Letter feature on the Reports screen. TaxCoach customizes a letter for each client of yours in the system, with 2007 changes affecting them, based on the report modules you've selected for them. You can open the file in MS Word and print it on your letterhead - it's great for mailing to your clients in January with their tax organizer, or delivering to them with their completed returns. As always, nothing builds valuable relationships with clients better than showing them you're looking out for them and keeping them up to date.

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SUBSCRIBER Q&A
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Q: What's the best timing for sending out marketing materials for tax planning services during tax season?

A: I suggest the first round go out in late January, to arrive with 1099s, 1098s, and similar materials. I'd do another round in late February, and a third in mid-March.

Then I'd send a slightly different piece after April 15 to catch extenders and emphasize tax planning. (Example, 'Realtors Who Paid Too Much Tax Last Month: Here's How to Beat the IRS in 2007!')

The key is repetition, moreso than the exact timing.

Q: In adding a new individual who is self-employed, with Schedule C income only, where do I reflect the income? On the Business details screen I only see salary/guaranteed income, which doesn't exist for most self-employed people. Would I enter it on the Employment screen?

A: Schedule C income from a sole proprietorship does go on the Business screen - but not in the 'salary' field, rather in a field near the top entitled 'Business's net income.' You are correct that the employee and spouse 'salary' fields on this screen reflect only that portion of the business income that the owner and spouse realize as guaranteed payments or draw. TaxCoach breaks out this income to address self-employment tax and retirement plan contributions, among other items./p>

The questions on the 'Employment' screen, including the benefits questions, apply only to jobs the taxpayer or spouse hold outside their primary business(es). The questions on the 'Business' screen apply to those offered by the business(es) owned by the taxpayer/spouse.

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We're happy to answer your questions on TaxCoach content, features, marketing, or general taxation. Call the support line at 513/321-2820, or email support@taxcoachsoftware.com. If we can't answer immediately, or we think the answer will be useful to all of our subscribers, we'll publish it (anonymously) here in the 'Subscriber Q&A' section of TaxCoach Briefs.

Regards,

Ed Lyon
Keith VandeStadt
www.taxcoachsoftware.com

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