3 built-in tax planning strategies in ProSeries® Tax

We know that tax preparation and tax planning are not the same thing, but the most valuable service you can offer your clients isn’t filing an accurate return; it’s helping them see what’s coming and help them make smarter decisions throughout the year.

As a CPA with more than 35 years of experience and an Intuit® ProSeries® Tax user for my entire career, I’ve come to think of myself less as a tax preparer and more as a tax strategist. Here’s how I use the tools built into ProSeries to shift from compliance to strategy … and you can, too. Many of these are included in the ProSeries’ Features section on Intuit Accountants.

Two ways to build a tax plan in ProSeries

ProSeries offers two methods for tax planning; knowing when to use each one is the foundation of an efficient planning practice.

The first is the tax planner, accessed through the Tools menu. It’s a clean, one-page format that lets you model income changes side by side and see the tax impact instantly. The second is what I call the “save as” method by taking a completed return, saving a copy with “plan” appended to the client’s file name, and then modifying that copy to model a specific scenario.

Each has its place. The key is knowing which situation calls for which tool.

When to use the tax planner

The tax planner is ideal when you’re working with dollar differences, such as a client who wants to explore a Roth conversion at three different amounts, someone who just received a one-time bonus, or a business owner trying to project their estimated tax payments for the rest of the year.

One of the most practical uses I’ve found is an estimated tax calculation. Let’s say a client calls mid-year and says, “I’ve already made $75,000 in capital gains this year, but I only made $50,000 last year. What does my tax situation look like?” I can double-click into the long-term capital gains line, enter the updated number, and instantly show them the difference in tax owed. From there, I can mark the estimated tax box at the bottom of the planner and click directly to the estimated tax worksheet. ProSeries recalculates the vouchers automatically. No starting from scratch. No rebuilding a return.

The tax planner is also excellent for qualified charitable distributions (QCDs). If a client has reached the required age and is weighing whether to take a QCD from their IRA, I can show them the tax impact with and without that distribution on a single page. In one example, a $40,000 QCD saved a client more than $13,000 in income tax. That’s a conversation worth having and takes only minutes to model.

Similarly, if a client needs to update their W-4 because of new income sources such as an inherited IRA, an unexpected 1099-R, or a bonus they hadn’t anticipated, the ProSeries tax planner handles that directly. Uncheck the estimated tax box, check the W-4 box, and ProSeries generates the additional withholding information the client needs to take to their employer.

ProTip: The tax planner operates at the federal level. For state estimated taxes, I run the federal plan first, then move to the state return’s estimated tax worksheet and update those figures manually. It’s a quick extra step that ensures clients get the full picture.

When to use the ‘save as” method

The save as method is what I reach for when the situation is too complex for the tax planner’s streamlined input. The tax planner doesn’t pull directly from the return’s underlying forms, which means anything involving intricate calculations such as installment sales, depreciation decisions, passive loss rules, and real estate professional status, is better handled by working directly inside a copy of the return itself.

To use this method, finish the current year return, go to File, choose Save As, and add the word “plan” to the end of the client’s file name. That’s it. You now have a full copy of the return with all the prior year data intact, ready to be modified.

I use this method almost universally when a client is selling a business or rental property, working through an installment sale, or dealing with any situation where the correct answer depends on getting depreciation recapture, entity classification, or passive activity rules exactly right. If there is a Section 1202 small business stock sale, potential AMT exposure, or a cost segregation study to model, I’m not going to trust a summary input field. I want the full return doing the calculation.

Business sales, in particular, warrant extra care. I’ll often run a “save as” on the business entity return to get estimated K-1 amounts, then carry those figures into the individual’s plan file. That way the individual tax plan is grounded in real, calculated numbers rather than estimates. And when depreciation decisions are involved, I’ll sometimes combine both methods: use the save as to model the return with full bonus depreciation taken, then run the tax planner to show clients what years 3, 4, and 5 might look like.  Making all available depreciation in year one can look attractive until you realize you may be creating taxable income in a year when you’re also selling a property.

Presenting the plan to clients

The save as method gives you something the tax planner can’t: a complete, working tax return you can use to generate a customized client letter directly from ProSeries.

Under the Letters section, you can create a custom client letter for tax planning engagements. Nothing is left to guesswork, so here are a few notes:

• Mine includes a transmittal-style opening that lists every assumption I used to prepare the plan: the income and deductions I carried over, the items I added or removed, and any changes I made to credits or other line items.
• If a client’s child is aging out of an education credit, I note that explicitly, along with the dollar amount of the change.
• If there’s a proposed rental property sale, I include the cost basis, accumulated depreciation, estimated sales price, and projected closing costs.

Communicating this kind of information to the client matters because a tax plan is only as useful as it is understandable. Clients need to know what assumptions went into the numbers so they can make informed decisions—and so you’ve documented your work if questions arise later. The more complex the transaction, the more detailed the letter needs to be.

Custom client letter codes in ProSeries pull directly from the return, so federal and state tax amounts flow into the letter automatically. I maintain a template and copy it into each new planning engagement, customizing the assumptions section for each client.

Customization settings that make planning easier

A few settings in ProSeries are worth enabling if you’re doing regular tax planning work. Under the Options menu, I keep the taxpayer/spouse/joint indicators turned on. This becomes essential when clients have income in multiple states, weighing residency decisions, or considering filing separately. The married filing separate indicator, MFJ in the program, lets you run both scenarios quickly and see the dollar difference immediately.

I also keep “automatically freeze client letter” enabled. When you’re working in a save as plan file, you don’t want any changes you make there accidentally overwriting the original return. This setting provides a warning if that’s about to happen.

Building your strategy list

The tools in ProSeries are only as useful as the strategies you bring to the table. One of the most valuable exercises I’ve done in my practice, and something I started during my years on Intuit’s Tax Council, was sitting down and listing every tax strategy I could identify. Not just the ones I knew well, but all of them. These include the strategies I was confident executing, the ones I understood but hadn’t done often, and the ones I needed to learn more about before I could recommend them.

My list now exceeds 400 items. That’s not a number to be intimidated by; it’s a resource. When I sit down with a client, I’m running through categories: filing status, retirement contributions, QCDs, Medicare Income-Related Monthly Adjustment Amount implications for Medicare clients, estimated taxes, rental income, passive activity rules, entity structure, depreciation strategy, 1031 exchanges, QBI optimization, accountable plans, and tax credits at the federal and state level. Adoption credits, FICA tip credits, and energy credits often get overlooked precisely because they’re not intuitive to find.

For business clients, the questions multiply. Is the current entity structure optimal given the client’s income level, management structure, and long-term goals? Are they taking the right depreciation approach? Would a cost segregation study accelerate deductions in a way that actually benefits them or would it create problems in later years? Do they have an accountable plan in place?

The point isn’t to know everything. It’s to know what you know, know what you don’t, and have a path to the right professional when you need one. If a client needs a cost segregation study, I need to know what that is, where the results go in the return, and who to send them to. The technical execution matters, but so does the referral network.

Tax planning is an ongoing conversation

Tax planning isn’t a one-time deliverable. It’s a practice built on regular conversations, updated projections, and a willingness to ask “what if” before clients end up with a surprise.

ProSeries gives you the tools to do that work efficiently with the tax planner for quick, clean projections, the save as method for complex scenarios that require the full weight of the return; and the custom client letter to communicate your findings clearly and document your assumptions. The strategy behind those tools is up to you.

Know your clients. Know your tools. And keep building your list.