Comprehensive, Multi-year Tax Planning is the Best Way to Enhance After-Tax Returns
We have a saying at HCM, “It’s not what you make that counts, it’s what you keep.”
From designing your investment portfolio, to making large purchases, to giving to charity, to living off your assets in retirement, nearly every financial decision you make has tax implications. That is why it is important to work with Wealth Advisors well-versed in financial planning and tax services who can coordinate your wealth, investment, and tax planning into one cohesive financial strategy. We are one of the few advisory firms able to provide this service for you.
Taxes are one of the few variables you can control. Do it well!
Efficient Tax Planning
Planning is the key to successfully reducing your tax liability. We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income in the long-term.
We make it a priority to enhance our mastery of the current tax law, complex tax code, and new tax regulations so that you can minimize your tax burden. Taxable events happen all year, not just during Tax Time; as a result, we’re working to optimize your situation year-round too.
We recommend Tax Saving Strategies that help you:
- Grow and preserve assets by keeping Uncle Sam out of your pockets.
- Defer income so you can keep your money now and pay less taxes later.
- Decrease taxes on your income so you keep more of what you make.
- Diminish taxes on your estate so your family keeps more of what you've made.
- Lessen taxes on your gifts so you can give more.
- Curtail taxes on your investments so you can grow your wealth faster.
- Reduce taxes on your retirement distributions so you can retire in style.
Tax Planning Services
Here's just a few of the strategies we implement to reduce your tax bills and keep more of your money in your pocket:
- Income Tax Smoothing & Tax Bracket Management: shifting income or expenses from one year to another or deferring tax liabilities through certain investment choices can allow you to avoid spikes in tax bills, giving you a lower tax burden overall.
- Roth Conversion Analysis: converting a Traditional IRA to a Roth IRA can be a great way to generate tax-free distributions and avoid Required Minimum Distributions (RMDs), but it’s not for everybody. We can look at your current assets as well as your plans and goals to chart the best course for your retirement investment future.
- Retirement Distribution Management: Not all income is taxed equally. Earned income and short-term capital gains are taxed as ordinary income, which can be up to a marginal rate of up to 37%. Long-term capital gains, however, top out at a marginal rate of 20%, with a substantial portion able to be taxed at 0%. Additionally, traditional IRAs and 401(k)s are tax-deferred, while Roth IRAs and Roth 401(k)s are tax-exempt. By advising you on when and how much to draw from your different accounts, your tax burden can minimized, effectively increasing the returns on your investments.
- Basis Management: for HCM, comprehensive planning includes planning for your legacy. A tax-optimized estate plan can manage the basis on which your heirs’ inheritances are taxed, ensuring more of your assets can go on to continue the work you did.
- Loss Harvesting: even when the value of your stocks decreases, it can still be leveraged for your benefit. After selling certain assets at a loss, you can apply that loss to other realized gains to decrease your tax bill. Unused gains can be carried forward indefinitely. This means a firm that provides comprehensive multi-year tax planning take advantage of a market downturn now to help you better realize financial goals years ahead in the future.
- Stock Option Management: when should you exercise your stock options, and what should you do when you do exercise them? Additionally, how do you minimize the tax burden resulting from you exercising your options? We’re happy to weigh your options with you and provide guidance on an optimal path.
- Deduction Bunching: oftentimes, the itemized deductions you’re eligible to claim aren’t quite greater than the standard deduction. One way to maximize deductions and minimize your tax bill is to “bunch” deductions, claiming them every other year and taking the standard deduction on alternate years. We can analyze your situation, let you know if you’re a good candidate for this tactic, and make sure you get the largest total deduction possible over a long-term horizon.
- Tax Return Preparation: we not only craft a comprehensive long-term strategy to optimize your tax bill, we also execute the plan, preparing and filing taxes for you on the federal, state, and local levels.