Tax Planning

Virtually anytime money is in motion, there are tax implications. Tax planning looks forward to identify potential taxes that could be reduced or eliminated with a variety of strategies.

Filing a tax-return is generally a BACKWARD looking event. Tax preparers use income and deductions from the previous calendar year to complete your tax-forms. The problem with this is sometimes an action, such as a retirement account withdrawal or stock sale, creates a tax liability that isn’t understood until the tax-year is over. At that point it is usually too late to take an offsetting action. In contrast, tax planning is the FORWARD looking process of estimating the tax impact of a specific action or broader strategy. If taxable events are identified before a calendar year is over, oftentimes these can be offset or mitigated with a variety of strategies which can SUBSTANTIALLY reduce someone’s tax bill. 

Additionally, regularly reviewing a tax return and proactively planning can help retirees avoid tax-traps and avoid paying more than necessary. Our review process is always on the lookout for:

1. The risk of breaching Medicare IRMAA thresholds
2. Opportunities to capture 0% long-term capital gains
3. Tax loss harvesting opportunities
4. Unintended taxation of Social Security benefits
5. Opportunities to convert money into tax-free Roth accounts.