Tax Planning Strategies Explained
Tax planning is the practice of being strategic about when and how much you pay to the IRS. If you haven’t been strategic about your taxes, you probably pay more than you’re legally required to. By using tax planning, we can help you work toward minimizing your tax burden. This includes helping to take advantage of tax breaks, planning your income distributions, seeking to prevent highly taxable events, and using deductions and credits to help reduce your tax liability.
Our firm has over 30 years of experience helping our clients with customized tax reduction strategies. Our team can help you maximize gains, cut losses, and retain wealth. Tax planning continues when you receive retirement income. We can help you plan your retirement income distributions to help reduce your taxes and allow you to keep more of your income
We customize our tax planning strategies for your financial situation. We consider your current income sources, investment accounts, and potential deductions and credits to create a plan that helps reduce your tax burden. Here are some examples of what we do to make the tax code work for you:
- Work toward maximizing contributions to tax-deferred retirement accounts
- Help prevent highly taxable events, such as capital gains tax on the sale of assets
- Evaluate benefits of Roth conversions and other vehicles for tax-free retirement income
- Manage your distributions in retirement to help avoid taxes on Social Security and Medicare
- Mitigate estate taxes with an estate planning strategies
- Develop a strategy to avoid "stealth taxes" that can quickly wipe out savings
Can Tax Planning Strategies Save Me Money?
Absolutely. Instead of looking for tax deductions and credits after the fact, tax planning strategies involves being deliberate about your financial decisions. Every investment decision you make may affect your tax return. It’s our job to help you work toward maximizing your after-tax earnings.
What Should I Consider When I Think about Taxes?
When you think about tax planning strategies, we want to consider your retirement and investment accounts to help reduce your tax burden. It can mean contributing to a tax-deferred investment account, using Roth accounts to receive tax-free income in retirement, and preventing excess capital gains taxes on your investment earnings.
Why Is Tax Planning Important?
It takes money, time, and dedication to build significant wealth. The more money you spend on taxes, the less you have available to save or invest. We can help you prioritize your investment goals for the future while working toward minimizing your taxes. And since there’s no benefit to paying more than you’re required to, it’s important to use tax planning strategies to help reduce your taxes.
Am I Paying Too Much in Taxes?
If you haven’t used tax planning strategies, there’s a good chance you’re paying more in taxes than you have to. We can review your financial situation and talk to you about working toward minimizing your tax obligation. It’s important to use a holistic view of your finances to create a suitable tax reduction strategy for your situation.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.