# SavingsMax Tax Strategy Planning — Domain Scoping Document

**Platform Name:** SavingsMax Tax Strategy Planning
**Author:** Ledger (Senior Accounting & Finance Specialist)
**Date:** 2026-05-05
**Recipient:** Atlas (Full-Stack Developer & Internal Database Architect)
**Status:** Domain scope complete; ready for Atlas to draft technical build spec

---

## 0. Business Model & Operating Constraints (CRITICAL)

These constraints shape the product significantly. Atlas must design around them.

| Item | Decision | Build Implication |
|------|----------|-------------------|
| **Practitioner credentials** | Jimmie holds PTIN but operates this in CFO / strategic advisor capacity | Disclaimer language: "Strategic planning recommendations under fractional CFO engagement. Tax positions to be confirmed by your CPA/EA of record before implementation." |
| **Service scope** | Strictly planning — NO return preparation | No 1040/1120-S/1065 form generation; no IRS e-file integration; no signing as paid preparer |
| **Implementation handoff** | Each strategy hands off to client's CPA or EA for execution | Each client record needs: CPA/EA contact info; each strategy memo needs an "Implementation Partner" section with handoff instructions |
| **Pricing model** | **Per-strategy fee = 12% of estimated tax savings** (flat) | Fee calculator layer applies 12% to each strategy's estimated savings; outputs separate fee proposal PDF; full fee charged regardless of whether SavingsMax or partner executes |
| **Invoicing** | External — Jimmie invoices through existing tools (QBO / Client Hub) | NO billing engine, NO collection tracking, NO engagement-letter automation in v1. Engine only calculates and displays the charge. |
| **Brand** | SavingsMax Tax Strategy Planning | All client-facing PDFs branded; consider logo, color palette, deliverable templates |

---

## 1. Executive Summary

Jimmie is building a year-round tax planning platform for J2's existing book (~40 SMB clients) and net-new HNW prospect work. The tool ingests financial reports + prior-year tax returns + owner personal data, runs a full federal/state tax projection across a 3–5 year horizon, evaluates a comprehensive strategy library, and produces both internal decision-support and client-facing deliverables.

**Confirmed scope decisions:**

| # | Decision | Selection |
|---|----------|-----------|
| 1 | Client scope | Both — J2 existing book + new HNW work |
| 2 | Computation depth | **Full form-replication engine** (audit-grade) |
| 3 | Entity coverage | **Multi-entity** rollup |
| 4 | State scope | **Federal + state** (with PTET logic) |
| 5 | Personal depth | **Full personal picture** |
| 6 | Output | **Internal decision-support + client-facing memo/checklist** |
| 7 | Time horizon | **Multi-year (3–5 years)** |
| 8 | Prior return ingestion | **OCR/AI extraction + manual review** |

---

## 2. Input Schema

### 2.1 Client Master Record

| Field | Type | Notes |
|-------|------|-------|
| Client ID | UUID | Primary key |
| Client name | text | |
| Filing status | enum | Single, MFJ, MFS, HoH, QW |
| State of residence | enum | All 50 + DC |
| Date of birth (taxpayer) | date | Drives RMD, catch-up, retirement age triggers |
| Date of birth (spouse) | date | If MFJ |
| Spouse name | text | |
| Spouse employment status | enum | W-2, SE, retired, none |
| Dependents | array | Name, DOB, qualifying child/relative, student status |
| Address | nested | For SALT, locality |
| Multi-state residency | array | If part-year |

### 2.2 Entity Stack (one or more per client)

| Field | Type | Notes |
|-------|------|-------|
| Entity ID | UUID | |
| Entity name | text | |
| Entity type | enum | Sole prop / Schedule C, Single-member LLC, Multi-member LLC, S-corp, C-corp, Partnership, Trust |
| EIN | text | |
| Owner stake % | decimal | |
| State of incorporation | enum | |
| States of operation | array | Nexus footprint |
| Industry / NAICS | text | |
| SSTB flag | bool | For QBI logic |
| Books source | enum | QBO, IES, Manual, Other |
| Date entity formed | date | |
| Tax year-end | date | Fiscal vs. calendar |

### 2.3 Per-Entity Financial Data (current year + 3 prior)

| Field | Type | Source |
|-------|------|--------|
| Gross revenue | currency | P&L |
| COGS | currency | P&L |
| Gross profit | calculated | |
| Operating expenses (by category) | nested | P&L by account |
| Owner W-2 (S-corp) | currency | Payroll |
| Guaranteed payments (partnership) | currency | K-1 |
| Net income (book) | currency | P&L |
| Book-to-tax adjustments | nested | M-1/M-3 items |
| Net income (tax) | calculated | |
| Depreciation (book) | currency | |
| Depreciation (tax — MACRS) | nested | By asset, by class life |
| Section 179 elections | nested | Asset, amount |
| Bonus depreciation | nested | Asset, amount |
| Interest expense (business) | currency | |
| Distributions to owner | currency | |
| Draws | currency | |
| Dividends paid | currency | C-corp |
| Balance sheet snapshot | nested | Cash, AR, AP, inventory, fixed assets, accumulated depreciation, debt, equity |
| Retained earnings | currency | |
| Capital account by partner | nested | If partnership |
| Loans outstanding | nested | Type (MCA, term, LOC, owner), balance, rate, maturity |

### 2.4 Owner Personal Data (current year + 3 prior)

| Category | Fields |
|----------|--------|
| **Wages** | W-2 box 1, 3, 5, 12 (codes), 14 — taxpayer + spouse |
| **Interest income** | Schedule B — taxable, tax-exempt, US Treasury |
| **Dividend income** | Schedule B — ordinary, qualified, capital gain distributions |
| **Capital gains** | Schedule D — short-term, long-term, carryforwards, basis details |
| **Schedule E** | Rental real estate (per property: address, type LTR/STR, basis, depreciation, mortgage int, expenses, days rented vs. personal); K-1s from partnerships, S-corps, trusts |
| **REPS hours** | Taxpayer + spouse — hours per RE activity for material participation |
| **Retirement balances** | Traditional IRA, Roth IRA, SEP, SIMPLE, 401(k), Solo 401(k), 403(b), 457, DB plan, Cash Balance |
| **Form 8606 basis** | Roth conversion tracking, non-deductible IRA basis |
| **HSA** | Balance, contribution YTD, HDHP coverage status (self/family) |
| **529 plans** | Balances, contributions YTD, beneficiaries |
| **Brokerage accounts** | Cost basis, unrealized gains by lot |
| **Crypto holdings** | Cost basis, holding period |
| **Charitable plans** | Cash, appreciated stock, DAF balance, intended giving |
| **Mortgage** | Primary residence (balance, rate, interest paid, acquisition date), secondary |
| **SALT** | Property tax, state income tax estimate, sales tax (if applicable) |
| **Health insurance** | Self-employed deduction eligibility, ACA marketplace, COBRA |
| **Estimated payments** | Federal + state, by quarter, YTD |
| **Withholding** | Federal + state, YTD |
| **Other deductions** | Student loan interest, alimony pre-2019, educator expenses, etc. |

### 2.5 Prior Year Return Data (3 years) — OCR Extraction Targets

**Federal 1040:**
- Filing status, dependents
- AGI, taxable income, tax (regular + AMT + NIIT)
- SE tax
- Total payments (withholding + estimates)
- Refund / balance due
- Effective rate, marginal rate

**Schedules:**
- Schedule A: itemized deductions detail
- Schedule B: interest/dividends
- Schedule C: SE income detail (if not S-corp)
- Schedule D + 8949: capital gains detail, carryforwards
- Schedule E: rental + K-1 detail
- Schedule SE: SE tax calculation
- Form 4562: depreciation by asset
- Form 8606: Roth/IRA basis
- Form 8995/8995-A: QBI calculation
- Form 6251: AMT
- Form 8960: NIIT
- Form 5329: early withdrawal penalties

**Carryforward Tracking:**
- NOL carryforward
- Capital loss carryforward
- Charitable carryforward
- Passive activity loss carryforward (per activity)
- AMT credit carryforward
- Foreign tax credit carryforward
- Prior year minimum tax credit

**Entity Returns (1120-S, 1065, 1120):**
- K-1 detail per owner
- M-1/M-3 reconciliation
- Depreciation schedules
- Owner basis tracking

**State Returns:**
- State AGI, taxable income, tax
- State-specific credits, modifications
- Multi-state apportionment

### 2.6 Current Year Planning Assumptions

| Field | Type | Notes |
|-------|------|-------|
| Projected revenue change | % or $ | Per entity |
| Anticipated capital events | nested | Asset sales, exits, equipment purchases, RE transactions |
| Family / life events | nested | Marriage, divorce, birth, death, retirement, relocation |
| Charitable intent | currency + type | Cash, stock, DAF, CRT |
| Retirement contribution intent | currency | Per plan type |
| Major purchases | nested | Real estate, vehicles, equipment, with timing |
| Roth conversion intent | currency | |
| Estimated payment plan | nested | By quarter |

---

## 3. Strategy Library

Each strategy carries: **trigger logic** (when it applies), **disqualifiers** (when it's blocked), **calculation method** (how to estimate $ savings), and **interaction warnings** (strategies that conflict or compound).

### 3.1 Entity Structure

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 1.1 | **S-corp election** | Schedule C net income > $50K AND owner is sole prop / SMLLC | Foreign owner, > 100 shareholders, ineligible entity type | (Net SE income − reasonable comp) × 15.3% SE tax savings; subtract payroll admin cost (~$1,500) |
| 1.2 | **Reasonable comp optimization** | Existing S-corp | None | Compare current W-2 to industry benchmark (RCReports methodology); model FICA savings vs. QBI/retirement impact |
| 1.3 | **C-corp election** | Owner bracket > 32% AND high reinvestment AND fringe benefits desired | Pass-through losses needed at owner level | 21% C-corp rate vs. owner marginal; double-tax modeling on distributions |
| 1.4 | **Multi-entity restructuring** | Multiple revenue streams, IP, real estate held with operating biz | None | Asset protection + management co. fee deduction + IP licensing |
| 1.5 | **Spousal partnership / payroll** | Spouse with no current income | Spouse has high W-2 elsewhere | Income splitting + spousal retirement plan eligibility |
| 1.6 | **Family Limited Partnership** | Estate > $5M, want wealth transfer | None | Valuation discount 15–35% on transferred interests |

### 3.2 Retirement Plans

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 2.1 | **Solo 401(k)** | Self-employed, no W-2 employees beyond spouse | Has non-spouse employees | Up to $70K (2025) + $7,500 catch-up; deduction × marginal rate |
| 2.2 | **SEP-IRA** | Self-employed | Wants Roth feature, plan loans | 25% of comp up to $70K (2025); deduction × marginal rate |
| 2.3 | **SIMPLE IRA** | Small employer (≤ 100 employees) | High contribution desired | $16K + $3.5K catch-up (2025) employee; ~3% match employer |
| 2.4 | **Defined Benefit Plan** | Income $300K+, age 45+, want $100K–$300K+ contribution | Inconsistent income | Actuarially determined; can be $200K–$300K+ deduction |
| 2.5 | **Cash Balance Plan + Solo 401(k)** | Same as DB but more flexible | Same | Combined ~$150K–$400K depending on age/income |
| 2.6 | **Mega Backdoor Roth** | Plan allows after-tax + in-service distributions | No qualifying plan | $46K after-tax conversion potential |
| 2.7 | **Backdoor Roth IRA** | High earner (above Roth phase-out) | Existing pre-tax IRA balance triggers pro-rata | $7K (2025) tax-free growth; need Form 8606 |
| 2.8 | **Roth Conversion** | Low-income year, gap before SS/RMD | Conversion pushes into higher bracket | Convert at low rate; future tax-free withdrawals; multi-year ladder |
| 2.9 | **HSA as retirement** | HDHP coverage | Not on HDHP | $4,300/$8,550 + $1K catch-up; never withdraw, invest |

### 3.3 Depreciation / Capital

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 3.1 | **Section 179** | Equipment purchased, business income > deduction | Real property (limited), passive losses | Up to $1.22M (2025), phase-out $3.05M; deduction × marginal rate |
| 3.2 | **Bonus depreciation** | Qualified property purchased | Used assets eligible post-TCJA | 40% (2025), 20% (2026), 0% (2027) sunset; deduction × marginal rate |
| 3.3 | **Cost segregation** | Real property purchased > $500K basis | Recently held property | Reclass 20–30% of basis to 5/7/15-yr; PV of accelerated depreciation |
| 3.4 | **De minimis safe harbor** | Routine equipment $2,500/$5,000 or less | None | Immediate expense vs. capitalize |
| 3.5 | **Repairs vs. capitalization (TPRs)** | Building / equipment repairs | Improvement that adds value | Deduct vs. depreciate; immediate × marginal rate |

### 3.4 QBI (Section 199A)

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 4.1 | **QBI optimization** | Pass-through with QBI | C-corp | 20% of QBI deduction × marginal rate |
| 4.2 | **W-2 wage / UBIA management (above threshold)** | Above $383K MFJ (2024) | SSTB above full phase-out | Increase W-2 wages or UBIA to maximize 199A limit |
| 4.3 | **Aggregation election** | Multiple related trades/businesses | Common ownership < 50% | Pool W-2 wages/UBIA across entities |
| 4.4 | **SSTB spin-off** | SSTB earnings above threshold with non-SSTB component | Pure SSTB | Separate non-SSTB activity to preserve QBI |
| 4.5 | **Income shifting below threshold** | Just above $383K MFJ | Income too high | Retirement contributions, charitable, defer income to drop below threshold |

### 3.5 Income Shifting / Family

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 5.1 | **Hire children** | Children age 7+, legitimate work | No real work, S-corp owner (FICA still applies) | Up to $14,600 (2024) standard deduction at 0% federal; saves owner marginal × wages |
| 5.2 | **Hire spouse** | Spouse not employed elsewhere | Spouse high W-2 | Enables HSA family, retirement plan, fringe benefits |
| 5.3 | **Augusta Rule (§280A(g))** | Owns residence, business needs meeting space | > 14 days/yr rental, no FMV documentation | 14 days × FMV daily rate; tax-free to homeowner, deductible to business |
| 5.4 | **Self-rental** | Owner owns RE rented to own business | Passive loss limitations | Rental income, depreciation deduction; nuanced PAL rules |
| 5.5 | **Custodial Roth IRA for kids** | Children with earned income | No earned income | $7K (2025) Roth contribution; decades of tax-free growth |

### 3.6 Real Estate

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 6.1 | **STR loophole** | Avg stay ≤ 7 days AND material participation (100+ hrs and most of any individual) | Doesn't meet material participation | Treat as non-passive; depreciation losses offset W-2/SE income |
| 6.2 | **REPS (Real Estate Professional Status)** | 750+ hrs in RE AND > 50% personal services in RE | W-2 job (hard to clear) | Unlocks rental losses against active income |
| 6.3 | **1031 exchange** | Investment property sale | Personal residence, < 45 day ID | Defer entire capital gain; basis carries forward |
| 6.4 | **Opportunity Zone** | Capital gain to defer | Past 180-day window | Defer until 2026, basis step-up if held 10 yr |
| 6.5 | **Cost segregation on rental** | Rental property > $500K basis | Recently studied | Same as 3.3 |
| 6.6 | **Passive loss harvesting** | Suspended passive losses + new passive income | All income active | Match suspended losses against new passive income |

### 3.7 Charitable

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 7.1 | **Donor Advised Fund (DAF)** | High-income year + multi-year giving plan | None | Bunch contributions × marginal rate; appreciated stock avoids LTCG |
| 7.2 | **Bunching** | Itemized just under standard deduction | Already well above SD | Group 2 yrs of giving into 1; alternates standard + itemized |
| 7.3 | **Charitable Remainder Trust (CRT)** | Appreciated low-basis asset, want income stream | Liquidity needs | Avoid LTCG on sale + income tax deduction (PV of remainder) |
| 7.4 | **Charitable Lead Trust (CLT)** | Wealth transfer + charitable intent | Liquidity needs | Reduce gift/estate tax on remainder to heirs |
| 7.5 | **Qualified Charitable Distribution (QCD)** | Age 70.5+, IRA RMD | Under 70.5 | Up to $105K (2024) directly from IRA, satisfies RMD, excludes from AGI |
| 7.6 | **Appreciated stock vs. cash** | Holding > 1 yr stock with gains | Short-term holding | Avoid LTCG + full FMV deduction |

### 3.8 Health & Benefits

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 8.1 | **HSA contribution** | HDHP coverage | Non-HDHP, Medicare enrolled | $4,300/$8,550 (2025) + $1K catch-up × marginal rate |
| 8.2 | **Self-employed health insurance** | SE income, no spouse subsidized plan | Spouse employer-sponsored available | Above-the-line deduction × marginal rate |
| 8.3 | **Section 105 / HRA / ICHRA** | Small employer, want to reimburse medical | Larger employer | Deduct medical reimbursements |
| 8.4 | **Accountable plan** | S-corp owner with business expenses | C-corp, no expenses | Tax-free reimbursement vs. unreimbursed (now non-deductible) |

### 3.9 State / SALT

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 9.1 | **PTET election** | Pass-through with state income > $10K SALT cap, in eligible state (~32 states) | Resident of TX/FL/NV/etc. (no state income tax) | Federal deduction at entity level × marginal rate; net of state credit mechanics |
| 9.2 | **State residency planning** | High state income, mobile lifestyle | Tied to state | Full state tax savings annually |
| 9.3 | **Sourcing / apportionment review** | Multi-state operations | Single-state | Reduce state tax by reallocating to lower-rate states |
| 9.4 | **State NOL utilization** | State NOL carryforward | None | State tax × NOL absorbed |

### 3.10 Debt / Cash Strategy

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 10.1 | **MCA restructuring** | Existing MCAs (factor rate, not interest) | None | Convert to term loan with true interest deductibility; cash flow + tax benefit |
| 10.2 | **Owner loan vs. capital contribution** | Owner funding entity | None | Interest income/expense vs. distribution mechanics |
| 10.3 | **Interest tracing** | Mixed-use borrowing | None | Properly allocate interest to business / investment / personal |

### 3.11 Capital Gains / Investment

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 11.1 | **Tax loss harvesting** | Realized gains + unrealized losses | Wash sale risk | Offset gains with losses; net to $3K ordinary deduction |
| 11.2 | **LTCG holding** | Approaching 1-yr mark | Need to sell | Save (ordinary − LTCG) rate × gain |
| 11.3 | **§1202 QSBS exclusion** | C-corp stock held 5+ yr, original issuance, qualifying biz | Non-qualifying biz | Exclude up to $10M or 10x basis, whichever greater |
| 11.4 | **Installment sale** | Large gain, can accept payments over years | Need full proceeds now | Spread gain across years; lower marginal rate |
| 11.5 | **NIIT planning** | MAGI near $250K MFJ threshold | Far above threshold | Avoid 3.8% surtax on investment income |

### 3.12 Estate / Wealth Transfer

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 12.1 | **Annual exclusion gifts** | Net worth > $5M | None | $19K (2025) × recipients × years; removes asset + appreciation from estate |
| 12.2 | **Lifetime exemption use (2026 sunset)** | Net worth > $7M | Estate small | Lock in $13.6M exemption before 2026 sunset to ~$7M |
| 12.3 | **GRAT** | Appreciating asset | Stable asset | Transfer appreciation gift-tax-free if survives term |
| 12.4 | **SLAT** | Married, want to use exemption + retain access | Single | Use exemption while spouse retains indirect access |
| 12.5 | **Step-up in basis planning** | Older taxpayer, low-basis assets | None | Hold appreciated assets until death for basis reset |

### 3.13 Year-End / Misc

| # | Strategy | Trigger | Disqualifier | Savings Calculation |
|---|----------|---------|--------------|---------------------|
| 13.1 | **Estimated payment optimization** | Any taxpayer | None | Hit safe harbor (110% prior year for AGI > $150K, else 100%) |
| 13.2 | **Withholding adjustment** | W-2 income | None | Increase Q4 withholding to cure underpayment (treated as paid evenly) |
| 13.3 | **NOL strategy** | Current NOL | None | Carry forward indefinitely (post-TCJA); 80% taxable income limit |
| 13.4 | **Income / expense timing** | Any taxpayer | None | Defer income or accelerate expenses based on bracket trajectory |

---

## 4. Decision Logic Engine

The strategy engine should evaluate each strategy in this sequence per client:

1. **Trigger evaluation** — does the client meet the entry criteria?
2. **Disqualifier check** — any blocking factor?
3. **Savings calculation** — apply formula using current year + projected data
4. **Interaction analysis** — flag conflicts (e.g., S-corp election affects QBI; defined benefit affects cash flow)
5. **Implementation difficulty score** — Easy / Medium / Hard / Requires specialist
6. **Deadline awareness** — annual (12/31), election (3/15 for S-corp), funding (4/15 SEP), etc.
7. **Ranking** — by $ savings × confidence × ease

**Output per strategy:**
- Applicable: yes / no / partially
- Estimated savings: $ + range
- Confidence: high / medium / low
- Implementation difficulty
- Deadline
- Required actions
- Caveats / interactions

---

## 5. Outputs

### 5.1 Internal Decision-Support View (for Jimmie)

- **Tax projection dashboard:** current year + 3 prior + 3 forward; federal + state; AGI → taxable income → tax → effective/marginal rates
- **Strategy ranked list:** all evaluated strategies, applicable ones at top with $ savings, all others below with reason for non-applicability (audit trail)
- **Sensitivity analysis:** how does liability change with revenue ±20%, retirement contribution ±50K, etc.
- **Cash flow impact:** net of tax savings minus implementation cost (e.g., DB plan setup $3K + actuarial $2K/yr)
- **Carryforward tracking:** NOL, capital loss, charitable, AMT credit, passive loss balances
- **Deadline calendar:** all action deadlines for the planning year
- **Audit trail:** every projected number traces back to source input

### 5.2 Client-Facing Deliverables

All deliverables branded **SavingsMax Tax Strategy Planning**.

**Deliverable 1 — Annual Tax Plan Memo (PDF, 8–15 pages):**

The strategy memo focuses purely on tax value. **No fees shown here.**

1. Executive summary — projected liability + total potential savings
2. Current situation snapshot — entity stack, income sources, prior 3-yr trend
3. Federal + state projection — current year + multi-year forecast
4. Recommended strategies — ranked, each with:
   - What it is
   - Why it applies to you
   - Estimated savings
   - Implementation partner: who executes (client's CPA, EA, attorney, payroll provider, plan administrator)
   - What you need to do
   - Deadline
5. Action checklist — chronological by deadline, with Owner / CPA / EA / Other column
6. Estimated payment schedule
7. **Disclaimer:** "These are strategic planning recommendations prepared under SavingsMax Tax Strategy Planning's fractional CFO engagement. All tax positions must be reviewed and implemented by your CPA, EA, or other licensed tax professional. SavingsMax does not prepare returns or render tax advice as a return preparer."

**Deliverable 2 — SavingsMax Fee Proposal (PDF, 2–4 pages):**

Generated as a separate branded document. Presented after / alongside the strategy memo.

1. Header: client name, plan year, plan reference #
2. Strategy-by-strategy table:
   | Strategy | Estimated Tax Savings | SavingsMax Fee (12%) | Net Benefit to Client |
3. Total estimated savings, total SavingsMax fee, total net benefit
4. Fee structure explanation: "SavingsMax fees are calculated as 12% of the estimated tax savings each strategy is projected to deliver. Fees apply per strategy accepted, payable upon engagement, regardless of which professional ultimately executes the strategy."
5. Acceptance section: client checks which strategies they want to engage; signature block
6. Disclaimer: estimated savings are projections, not guarantees; final savings determined by actual filed return

**Deliverable 3 — Quarterly Update Memo (PDF, 3–5 pages):**
- YTD vs. plan
- Strategy progress
- Adjusted projection
- Q-end actions

**Deliverable 4 — Year-End Action Letter (PDF, 2–3 pages):**
- Final-quarter execution checklist
- Equipment / charitable / Roth conversion deadlines
- Estimated payment due dates

### 5.3 Fee Calculation & Lightweight Tracking

**Fee formula (v1):**
```
SavingsMax Fee per strategy = Estimated Tax Savings × 12%
```

Applied per strategy, displayed in Deliverable 2 (Fee Proposal). Full fee charged regardless of who implements.

**Strategy status tracking (lightweight, internal-only):**
- **Identified** — engine recommends
- **Proposed** — in client memo + fee proposal
- **Accepted** — client signs fee proposal for this strategy
- **Declined** — client passes (track for re-pitch in future planning cycles)
- **Executed** — done (Jimmie marks manually after handoff partner confirms)

No invoicing, no collections, no engagement-letter automation — Jimmie handles all that externally in QBO / Client Hub.

**Implementation partner registry per client:**
- CPA name + firm + contact
- EA (if separate)
- Attorney (estate / asset protection)
- Plan administrator (retirement plans)
- Insurance broker
- Investment advisor

**Internal reporting (for Jimmie):**
- Strategies accepted vs. declined per client
- Total fees quoted, total fees accepted (estimated revenue)
- Pipeline of declined strategies (re-pitch opportunity in future plans)
- Year-over-year client savings delivered

---

## 6. Cadence & Workflow

| Phase | Timing | Activity |
|-------|--------|----------|
| **Onboarding** | Client engagement start | Full data load (3 yrs returns + current financials + personal data); baseline projection; initial strategy memo |
| **Q1** | Jan–Mar | Prior year true-up after return filed; reconcile actual vs. projected; year-end 1099/W-2 review; update carryforwards |
| **Q2 (Mid-Year)** | Apr–Jun | Refresh with YTD actuals from QBO/IES; strategy adjustments; estimated payment review (Q2 due 6/15) |
| **Q3** | Jul–Sep | Equipment purchase planning window; estimated payment Q3 (9/15); retirement plan setup deadlines (10/1 SIMPLE) |
| **Q4 (Year-End Push)** | Oct–Dec | Final execution window: charitable, Roth conversions, equipment §179, retirement contributions; bonus / wage decisions for S-corps |
| **On-demand** | Any time | Triggered events: M&A, exit, marriage, RE purchase, inheritance, relocation |

**Data refresh sources:**
- QBO / IES: live pull via G-Accon or direct API (Cord owns this pipeline)
- Payroll: quarterly snapshot
- Brokerage / retirement: client-provided statements quarterly
- Tax returns: annual after filing

---

## 7. Critical Build Considerations for Atlas

1. **Annual maintenance overhead:** Tax brackets, phase-outs, contribution limits, depreciation rules change every year. Build the rules engine so updates are config-driven, not code-driven.

2. **State tax complexity:** ~32 PTET states with different mechanics. Phase the build — start with TX (no income tax — easiest), CA, NY, then expand.

3. **OCR validation:** Prior return ingestion via OCR will have errors. UI must surface low-confidence fields for human review before locking in.

4. **Multi-entity rollup math:** K-1 income flows from entity returns to personal 1040; must round-trip correctly with basis tracking.

5. **Audit trail:** Every projected number must trace back to source input + calculation step. Critical for defending the plan in a client conversation.

6. **Versioning:** Save snapshots at each major plan revision so we can show "what changed since last quarter."

7. **Disclaimers:** Software output is planning-grade, not return-grade. Final numbers come from filed return. Build disclaimers into every output template.

8. **Integration with existing J2 stack:**
   - Atlas library (client master record)
   - QBO / IES via G-Accon / direct
   - Eventually: tax software export (Drake, Lacerte, ProConnect) for cleanest data ingestion

9. **Phasing recommendation:**
   - **Phase 1:** Federal-only single-entity (S-corp + Schedule C), top 15 strategies, internal-only output
   - **Phase 2:** Multi-entity rollup, full personal picture, client-facing memo
   - **Phase 3:** Multi-state with PTET, full strategy library, OCR ingestion
   - **Phase 4:** Multi-year forecasting, estate strategies, advanced HNW

---

## 8. Resolved Items

| # | Item | Resolution |
|---|------|------------|
| 1 | Practitioner role | PTIN held; operates in CFO / strategic advisor scope (not as paid return preparer) |
| 2 | Software output | **Strictly planning**; handoff to client's CPA or EA for execution. NO return prep. |
| 3 | Pricing model | **Per-strategy fee** — requires billing layer per strategy lifecycle |
| 4 | Brand | **SavingsMax Tax Strategy Planning** |

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## 9. Net New Build Implications From Section 0 / 8

Atlas — these are the constraints beyond the core planning engine. All three are lightweight:

1. **Implementation partner registry** — each client has CPA/EA/attorney/plan admin contacts; every strategy memo names the handoff partner. Simple lookup table.

2. **Fee calculator + Fee Proposal generator** — apply 12% to each strategy's estimated savings; render a separate branded PDF (Deliverable 2). NO billing engine, NO collection tracking. Status flags only (Proposed / Accepted / Declined / Executed).

3. **Branded deliverable templates** — SavingsMax visual identity across all four PDFs (Strategy Memo, Fee Proposal, Quarterly Update, Year-End Letter). Pixel needs to produce a brand kit before Phase 2.

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**End of Scoping Document**
**Next step:** Hand to Atlas for technical build spec, data model design, phasing plan, and brand asset request to Pixel.