Tax Planning

Removing the Tax Payment Blinders:

Multi-Decade Tax Planning

Taxes play an enormous role in optimizing your finances — and not in a good way. Minimizing taxes based on the current tax laws and your personal financial projections is an integral part of building and keeping wealth.

We work with clients and their CPAs to help minimize your taxes over your lifetime, rather than focusing on just minimizing this year’s taxes. Decisions today that result in a small increase in current taxes can save significantly more on taxes through your lifetime.

How Tax Planning Differs from Tax Filing

Your CPA is your historian who takes the previous years’ financial decisions and figures out how to optimally file your tax return with the IRS.

We are your futurist. We take your CPA’s final product (your tax return) as the beginning of our process. We look for opportunities to lower taxes in the coming years and identify moves you can make now that will reduce your taxes over your lifetime.

Each year we’ll analyze your tax return alongside your long-term projections to identify opportunities to lower your life-time taxes. And we’ll do a detailed projection of what next year’s taxes will look like to identify opportunities and avoid surprises come April.

Taking Advantage of Tax Planning Windows

Throughout your life you’ll have unusual tax years, when your taxes are artificially lower than what is projected for other years of your life. When this happens we have a rare opportunity to realize some additional income in the eyes of the IRS – causing you to pay taxes at a lower rate today and avoid those taxes at higher rates later.

These windows can be created through planned life events such as retirement, maternity/paternity leave, starting a business, or real estate transactions – or through the surprises life throws at us such as a job loss, tax law changes, economic downturns, or qualifying for a tax credit.

Tax-Efficient Asset Locations

Traditional tax-deferred accounts, Roth accounts, and standard taxable accounts each have unique tax profiles with advantages and disadvantages. By matching the characteristics of the investments with the tax characteristics of the account, we can lower the drag taxes make on your portfolio – even in accounts without any tax benefits.

We strategically weight your portfolio’s investments in each account type to take advantage of these attributes and minimize your lifetime taxes. Our planning also withdraws funds from your tax-deferred, Roth, and taxable accounts in an order that minimizes taxation. Your optimal strategy will depend on your lifetime tax brackets and your goals for your money.

Avoiding “Tax Torpedoes”

One of the challenges with managing taxes is the complex and intertwined tax code. “Tax torpedoes” are situations where a small change in income triggers additional parts of the tax code or other laws, which increases costs to you. We help clients to proactively manage their finances to avoid “tax torpedoes” that could result in such things as increased Medicare premiums, eliminated deductions or tax credits, alternative minimum taxes, or tax penalties.

Book an introduction call with a Certified Financial Planner® to create your personalized tax plan.

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