Key Tax Planning Strategies

Tax time often brings about the desire to make some changes for the year ahead. Here are seven tax planning strategies you can implement:

1. Asset Location. Simply put, this is the practice of determining which of your investments are best held in taxable and tax-deferred accounts. 

2. Maximizing Qualified Contributions. Adjusting the amount you are saving in your 401k can possibly provide a desired outcome for your taxes next year.

3. Qualified Charitable Distributions. This tool allows IRA owners who must take a Required Minimum Distribution (RMD) to send funds directly to a charity without increasing your tax liability.

4. Tax planning within trusts. Trusts are established for a variety of reasons and they are subject to highly compressed tax rates. Tax planning for trusts is particularly important.

5. Tax Loss Harvesting. Investment losses can help you reduce taxes by offsetting gains or income.

6.  Tax efficient investments. Investments that are managed with the priority of keeping as much as you make as possible.

7. Roth conversions. For the long-term investor, a Roth conversion may make sense for planning purposes.

As part of our process as TVIA, we work with you to understand your tax situation as we make investment decisions. While we are not accountants, we will communicate with your CPA with your permission.