Tax planning is a part of our ongoing process that should continue beyond tax season. Working together can help avoid surprises and take advantage of provisions that can help you manage your tax exposure.
How you allocate your assets across taxable, tax-deferred, or tax-free accounts is important to determine how much you may keep and how much may go to Uncle Sam. Proper allocation can also help you tap into your money in the most tax-efficient manner when you begin taking distributions from those accounts—helping to avoid unnecessary taxation that can diminish your assets and your income potential over time.
Tax planning throughout the year also helps identify opportunities to manage your tax exposure through strategies that may include tax-loss harvesting, gifting to loved ones or the charitable organizations you support, or accelerating deductions (such as out-of-pocket medical expenses or charitable contributions) in a given tax year.
While the tax strategies that are right for you depend on your personal situation and circumstances, there’s no question that planning throughout the year can greatly reduce the potential for surprises when it comes time to file your next return.
To learn more about tax-advantaged investment strategies, reach out today.
The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss.
Managing Your Tax Exposure
April 14, 2022