Now that your tax return has either been filed or extended ahead of the April 15th tax deadline, you may be tempted to tuck away all thoughts of your taxes until next year. While tax return preparation is a once-a-year task, tax planning is an ongoing core component of your overall financial plan, the cornerstone that keeps decisions connected, and the missing link that transforms a collection of assets and financial accounts into a cohesive strategy.
We recognize that the tax thread is woven into every aspect of your financial life:
Investment strategy
Taxes act as a “drag” on your portfolio. Over time, even small improvements in tax efficiency can lead to impactful dollars in preserved capital.
An emphasis on asset location, which strategically places investments in specific account types – taxable, tax-deferred, or tax-exempt – minimizes taxes and maximizes after-tax returns. While asset allocation determines what you own, asset location dictates where you hold it, aiming to lower tax “drag” by pairing tax-inefficient assets with tax-advantaged accounts.
Cash flow management
Strategic tax moves, such as tax-loss harvesting can lower your immediate tax bill and increase cash available for reinvestment.
And, for a taxpayer in the 32% ordinary income tax bracket, for example, holding an asset for 366 days instead of 365 can cut the tax rate by more than half on the gain on the sale of that asset.
Timing with other deductions is also key to optimize taxes relating to the sale of your business or second home.
Retirement planning
Diversifying between Traditional pre-tax and Roth post-tax accounts, you gain the flexibility to pull distributions from different “buckets” to manage tax brackets during retirement.
Philanthropic planning
The meaningful integration of charitable giving into your overall wealth management, tax, and estate plan maximizes impact and efficiency. The utilization of qualified charitable distributions, appreciated assets, and donor-advised funds achieves tax savings, engages family across generations, and creates a lasting legacy.
Estate and legacy planning
Tax-aware estate planning uses tools like gifting and trusts to ensure more wealth passes to your heirs rather than being eroded by estate taxes.
So, whether you are contemplating the sale of your business or your investment property, a Roth conversion, which account to pull retirement distributions from, charitable giving, or family gifting, we collaborate with you to understand the big picture, to define your goals, to identify strategies, and to develop tailored, actionable solutions – not only to minimize taxes in the current year, but also to ensure that the outcome aligns with your financial plan, your retirement plan, and ultimately, your legacy.
Let’s get started
If you’d like to learn more or to plan with us, please reach out to start a conversation.
