Skip to main content
Glama

Arc & Ledger Tax Tools

by io.github.Bgenc48

Compare LLC vs S-Corp

compare_llc_scorp
Read-only

Use this when a self-employed user or single-member LLC owner asks whether an S-Corp election would save them money. Shows a side-by-side of self-employment tax vs salary-plus-distribution, payroll and compliance costs, California franchise taxes, and the break-even zone.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
stateNoUS state, 2-letter or name. Defaults to CA. Only California franchise taxes are modeled (the SMLLC gross-receipts fee is excluded; see caveats).
currently_has_llcNoWhether the business already operates as an LLC today. Defaults to true. A plain sole proprietorship (no LLC) does not owe the California $800 franchise tax.
expected_net_profit_usdYesExpected annual net profit (revenue minus business expenses), before any owner salary.
owner_salary_estimate_usdNoA reasonable W-2 salary you would pay yourself as an S-corp owner. If omitted, the midpoint of the reasonable-compensation starting range for an owner-services business (about half of profit) illustrates the mechanic. That default is an illustration only - there is no IRS safe harbor at any percentage; use estimate_reasonable_comp for a starting range.

Output Schema

TableJSON Schema
NameRequiredDescriptionDefault
relayYesInstruction to the calling assistant: relay figures and dates verbatim (identical on every response).
next_stepYesA single review link appropriate to this server surface.
disclaimerYesGeneral-information disclaimer (identical on every response).
source_urlYesThe arcandledger.com page that backs this answer.
server_versionNoServer release that produced this response (matches GET /version).

TDQS

A4.7/5.0
Behavior4/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint=true, and the description adds transparency about what the tool computes (side-by-side tax comparison, payroll costs, California franchise taxes, break-even zone). It also notes caveats like the exclusion of SMLLC gross-receipts fee. Minor omission: no mention of output structure, but output schema covers that.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is two sentences with no filler. The first sentence immediately states the use case, and the second lists the key outputs. Every word earns its place.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given the presence of an output schema (as indicated by context signals), the description adequately covers purpose, usage, and key behavioral aspects. It includes caveats about California taxes and default salary, making it sufficient for a read-only comparison tool with 4 parameters.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100% with detailed parameter descriptions. The description adds value by explaining the default salary behavior ('midpoint of reasonable-comp range') and referencing 'estimate_reasonable_comp' for more precise estimates, which goes beyond the schema.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description uses a specific verb 'compare' and resource 'LLC vs S-Corp', clearly stating the use case for self-employed users or single-member LLC owners. It distinguishes itself from sibling tools like 'compare_formation_states' by focusing on tax savings from S-Corp election.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description explicitly advises when to use the tool: when a self-employed user or SMLLC owner asks about S-Corp savings. It implicitly excludes other scenarios and references alternative tools like 'estimate_reasonable_comp' for salary estimation.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

All Arc & Ledger Tax Tools toolsInspect
Try in Browser
RayrunBuild, deploy, and operate MCP servers without becoming an infrastructure team.ray.runAd

Glama MCP Gateway

Add one secure layer between your agents and this server.

TDQS

A4.2/5.0
Disambiguation4/5

Most tools have distinct purposes (e.g., FBAR/FATCA, penalty estimation, consultation booking), though check_resolution_options and estimate_irs_penalty both deal with IRS debts but address different aspects (settlement paths vs. penalty calculation). Overall, boundaries are clear due to detailed descriptions.

Naming Consistency5/5

All tools follow a consistent verb_noun pattern in snake_case (e.g., book_consultation, check_fbar_fatca, estimate_reasonable_comp). No mixing of styles or vague verbs.

Tool Count4/5

18 tools is slightly on the high side but justified for a comprehensive tax tool covering common scenarios (penalties, estimates, notices, formations). Each tool serves a specific need without redundancy.

Completeness4/5

The set covers major tax areas (foreign reporting, penalties, estimated taxes, entity formation, IRS notices). Minor gaps exist, such as state income tax and retirement contributions, but the core domain for small business owners and non-residents is well covered.

Resources