Well, we made it to Wealth Management Issue #13: Tax Planning. You might be saying, “I already have a CPA for taxes for the business and family, what’s the connection to my investments? Or “ I don’t think we qualify for the estate tax, so we are all set.” Our perspective is that we believe tax planning underpins each of the other issues that we have discussed in this series. As a financial planning firm, we ask questions to understand your perspectives on tax and provide planning strategies on how to pursue your goals in the most tax-efficient manner possible. While we do not give direct tax advice, we are “tax-aware” of the implications that one set of financial decisions will have on your current and future financial picture. Let’s keep going.

Tax Planning

Number 13 out of 13 in our Wealth Management Issues Series

Tax Planning isn’t just about deductions, it includes looking at how your retirement plans are structured. You might have previous 401(k) plans from a previous hospital employer and have the current plan you offer to your employees. The decision to roll over and how has significant tax implications and requires planning. Depending on your goals, it may be more efficient to use insurance to transfer wealth to future generations and donate portions of your portfolio to maximize any charitable deductions. Tax is a part of your entire financial picture.
Coordination between your CPA and lead advisory or financial planning firm is key. Based on the investment performance and goals, it’s critical to coordinate with your other advisors like your CPA.
We work together with your other advisors to make the best possible recommendations within your financial plan.

Here are the 9 Key Tax Planning Strategies that we will explore.

1. Tax-efficient Investing: It’s what you keep, not what you make.
2. Adjusted Tax Withholdings: No sense in providing the IRS with a tax-free loan.
3. Tax Loss Harvesting: Utilize these losses to offset gains in the future.
4. $3,000 Capital Loss Opportunity: Against marginal rates = more savings.
5. Charitable Contributions: Direct transfer? Appreciated property/stock? Donor-Advised Funds for causes.
6. Reinvested Dividends: If declared it’s taxed – be mindful.
7. Qualified & Non-Qualified Retirement Plans: Lower taxes today and in the future w/ balance.
8. Accelerated State & Local Taxes: Evaluate with CPA to determine effectiveness.
9. Transitioning Current Assets: Discuss your vision for the eventual sale of a business. Decisions now impact options and outcomes in the future.

After reviewing these strategies with you and then your CPA, it’s likely that this will lead to goal attainment in the most tax-efficient way possible. The greatest risk is paying too much in taxes by not being aware of or utilizing appropriate means for deductions, exclusions, credits, donations, etc. As wealth strategists, our role is to look at separate aspects of your financial life making certain these work together for the best outcomes.

How often are you meeting with your financial planner and your CPA together? If you have outside investments, are those managers or firms being included in the coordination? If these meetings aren’t happening, why not? We are experienced at bringing these types of disparate advisors together to align your plan with the smartest tax strategies possible.

When considering these issues, it’s important to ask yourself, how do any of these affect you, your family, and your goals? The following installments will cover each of these Wealth Management Issues in greater detail. Our hope is this series of chapters will provide not only an educational forum but also promote thought, leading to action…in a holistic manner, of course. Learn about our other 13 Wealth Management Issues here.

Watch our Whiskey & Wealth Wednesday video of this article:

If you would like to learn more about this subject please contact us and we’ll be happy to help.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice.

By Anthony C. Williams, CWS, ChFC, MRFC, CLU | Investment Advisor Representative | President & Founding Partner of Mosaic Financial Associates & Orthopaedist Advisory Group | Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor.  Cetera is under separate ownership from any other named entity.