Focus on Financial Decisions You Can Control: Your Taxes

Tim Obendorf |
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There are many risks that we can’t control, and so we recommend focusing on financial decisions that we can control. One area where we find great opportunity to improve client financial outcomes is integrating tax planning into financial planning and investment management. Often this is viewed as either a year-end planning exercise or a first quarter analysis project. We believe tax planning should be integrated into decisions throughout the year. 

Here are the areas that we review throughout the calendar year:

  • IRA Contributions – maximize tax deductions and generate tax-deferred portfolio growth.

  • Tax Return Review – understanding your tax situation allows us to formulate future tax strategies.

  • Tax Projection – evaluate tax strategies while you have time to implement them.

  • Tax Loss Harvesting – reduce tax burden by realizing losses on underperforming assets.

  • Tax Gain Harvesting – realize gains in years where you won’t have to pay taxes.

  • Roth Conversions – get funds into a tax-free account with the least tax cost.

  • Charitable Contributions – maximize tax benefit of charitable giving by bunching multiple years’ giving into one year and giving appreciated assets.

  • Qualified Charitable Distribution – get a tax benefit from charitable giving even if you don’t itemize.

  • Optimize Source of Distributions - based on your specific tax situation, we will recommend the combination of distributions from taxable, tax-deferred, and tax-free accounts that will optimize your long-term financial success.

  • Tax Location of Investments - by taking advantage of investment account tax characteristics we help maximize after-tax cash flow.

Tax planning, as part of a comprehensive financial plan, is the process of arranging your finances in ways that postpone or avoid taxes. Based on your lifetime goals and financial plan, having a view of your long-term plans can be especially helpful in taking advantage of beneficial tax-law provisions, using tax deductions and tax credits to maximize your after-tax portfolio returns. By applying effective tax planning strategies, you can have more money to save and invest or more money to spend.

If you would like to learn more about tax planning advantages, contact us today.