Tax Planning Strategies

Tax Planning Strategies for Creating and Preserving Wealth

You don't just look for clues when something is as important as using tax-savvy long-term investment strategies and short-term tax-avoidance tactics to create a holistic financial plan of attack. It's important to get the best advice from a Certified Tax Coach, but you can't formulate plans or make sound business decisions unless you understand the underlying tax issues and why certain expenses are deductible while others aren't. Clever detective work might even reveal tax strategies that your tax advisor or investment manager haven't considered.

Tax planning becomes increasingly important as your income and estate grow. Using the right strategy can help you defer or avoid paying

Most CPAs and tax preparers look for quick ideas to reduce your tax burden each year while ignoring the better possibilities that long-term tax planning provide for your estate. Even when everything is done correctly on your taxes, you could be missing important opportunities to build wealth.

Tax planning is a separate function that portfolio managers, accountants and business advisors often overlook. Tax preparation and tax planning are two entirely different concepts, and if you want the best strategy based on your finances, investment preferences and family obligations, you need an expert who specializes in tax planning. The first step in planning a holistic tax strategy is understanding the differences among investors and taxpayers.

Tax Planning by the Numbers

A Certified Tax Coach understands that each taxpayer and investor is different, so he or she will spend the necessary time to understand your likes and dislikes, investment strategies, primary line of work and information about any businesses and investment that you already

IRAs and 401(k)s.

Wage earners who are in higher tax brackets can defer capital gains by investing in traditional IRAs and 401(k)s to postpone capital gains or regular income until a more favorable time to withdraw the proceeds.

Health savings accounts

Although Obamacare limits HSA contributions to $2,500 in 2015, you can still realize tax savings and free growth for the contribution.

1031 exchanges

Rolling the proceeds of a capital gain sale into a similar investment within 180 days is called a 1031 exchange and allows you to avoid paying capital gains tax.

Exchanging stock in an ETF

Exchange-traded funds can exchange stocks that are sold and generate gains with stocks moving into the index.

Holding appreciated investments until death

Your beneficiaries don't have to pay capital gains on investment growth because they get a stepped-up cost basis to match the property’s current value.

Transfer investments to family