Tax Planning Checklist

Send a tax-planning engagement letter via Practice Ignition, TaxDome, or DocuSign. Distinguish planning from compliance — scope creep into return prep without a change order is the most common realization-rate killer at year end.

Entity type drives every downstream branch: 1040 only, Schedule C, S-corp (1120-S + K-1), partnership (1065 + K-1), or C-corp (1120). Pull the most recent return and verify the entity hasn't changed since.

Use SmartVault, Liscio, or TaxDome client portal — never unencrypted email per IRS Pub 4557. Request prior-year return, YTD P&L and balance sheet, payroll registers, brokerage 1099 composites, K-1s from other entities, and any major-transaction docs (home sale, RSU vest, business sale).

Annualize YTD wages, K-1 distributions, and Schedule C net income through December 31. Add expected bonuses, RSU vest events, and one-time items (home sale, business sale, IRA conversion). The projection is the basis for every planning move that follows.

Watch for marriage-status changes mid-year, qualifying-child status for HoH, and threshold cliffs (NIIT at $250K MFJ, additional Medicare at $250K MFJ, IRMAA brackets for retirees on Medicare).

Use UltraTax, Lacerte, or ProConnect to model current year vs. next year side by side. Identifies bracket arbitrage opportunities — accelerate income into a low year, defer into a high year, time Roth conversions to fill the 24% bracket.

AMT mostly hits ISO exercises and large state-tax deductions in non-SALT-cap years. NIIT (3.8%) hits passive income above MAGI thresholds. QBI phaseout for SSTBs starts at $383,900 MFJ (2024) — service businesses lose the 20% deduction past the upper threshold.

For Schedule C, S-corp, and partnership clients only. Triggers reasonable-comp analysis, PTET election review, accountable-plan setup, and Section 199A QBI optimization. Skip for W-2-only individuals.

SALT cap of $10K still in effect. Most W-2 households take standard. If itemizing is close, consider bunching charitable gifts into alternating years using a donor-advised fund (DAF).

Max 401(k) deferral ($23,000 + $7,500 catch-up at 50+ for 2024). For self-employed, model Solo 401(k) vs. SEP-IRA vs. defined-benefit plan. Solo 401(k) usually wins because of the elective-deferral piece on top of the employer share.

Prefer appreciated long-term stock over cash to a public charity — avoids cap gain and gets FMV deduction. Clients over 70½ should evaluate QCDs from IRAs (up to $105K in 2024) which satisfy RMDs without raising AGI or IRMAA.

Walk through CTC ($2,000/child under 17, phaseout starting $400K MFJ), dependent care credit, education credits (AOTC vs. LLC), residential clean-energy credit (30% solar/battery through 2032), and EV credits ($7,500 new / $4,000 used with income limits).

Realize losses to offset realized gains plus $3K of ordinary income. Watch the 30-day wash-sale rule across all accounts including spouse's IRA. Coordinate with the client's investment advisor — don't trade without confirming.

Document reasonable comp using RCReports or comparable-data analysis. Wages too low draws IRS reclassification of distributions as wages plus payroll-tax penalties. The defensible target is industry comparables for the role.

Pass-through entity tax workaround for the SALT cap is available in 30+ states. Election deadlines and payment timing vary by state — NY requires election by March 15, CA requires June 15 prepayment. Miss the deadline and the deduction is gone for the year.

Bonus depreciation phasing down — 60% in 2024, 40% in 2025. Section 179 limit $1.16M (2024) with phaseout starting $2.89M of total purchases. Asset must be placed in service by Dec 31, not just ordered.

S-corp owners deduct home office, mileage, and cell phone through corporate accountable-plan reimbursements rather than 2106 expenses (which are suspended). Get reimbursements paid before Dec 31 with substantiation on file.

Safe harbor: 100% of prior-year liability (110% if AGI > $150K) or 90% of current year. Q4 federal due Jan 15. Underpayment penalty is computed quarter-by-quarter, so a December catch-up via withholding is more forgiving than a January 1040-ES check.

If client has W-2 income alongside K-1 / 1099 income, increasing year-end withholding via an updated W-4 retroactively cures Q1-Q3 underpayment because withholding is treated as paid evenly across the year.

Schedule federal payments through EFTPS (require enrollment 5-7 business days ahead) or IRS Direct Pay. State estimates through state DOR portal. Save confirmation numbers to the workpaper.

One-page summary: projected liability, recommended moves with deadlines, estimated tax savings per move, and items requiring client action (sign Roth conversion form, fund Solo 401(k), make charitable gift). Avoid burying the deadlines in narrative paragraphs.

Walk the client through the memo. Decisions need to be made in the meeting — passive review by email leads to December 31 phone calls about whether to fund the SEP-IRA.

Document decisions for the workpaper file under Circular 230 §10.34. Partner reviews and signs off before any return-prep work flows from the plan.

Late-December check: confirm Roth conversion executed, charitable gifts cleared, retirement contributions funded (or scheduled if SEP/Solo 401(k) deadline is later), and DAF contributions posted. Items not done by Dec 31 generally cannot be retroactively claimed for the current year.