System and method for identifying tax savings opportunities for a taxpayer

Abstract

The present invention is a computerized tax savings tool for adjusting a taxpayer's taxable income to identify tax savings opportunities. The tax savings tool may be implemented as a component of a proprietary tax preparation software system that is used to prepare tax returns for taxpayer clients of a tax preparation firm. The tool automates the calculations of legal steps that a taxpayer may take to reduce his or her AGI on a current or a future tax return, which in turn enables the taxpayer to take advantage of additional adjustments, deductions, exemptions, credits, etc. provided by the tax code of the taxing authority. The tax savings opportunities are presented in one or more onscreen reports that may be reviewed by a tax return preparer and taxpayer. The onscreen report identifies specific actions that the taxpayer may take to reduce his or her taxable income, and therefore, related tax liability.