Tax-Sensitive Planning

Tax-sensitive planning considers the tax implications of individual, investment, or business decisions, usually with the goal of minimizing tax liability. While decisions are rarely made solely on the basis of tax impact, it’s important to have a working knowledge of the income tax and/or estate tax issues and costs involved. Our preference is to coordinate with our clients’ accountants and tax advisors and to be proactive on behalf of our clients.

A major goal of tax planning is minimizing federal income tax liability. This can be achieved by:

  • Reducing taxable income through income deferral or shifting
  • Deduction planning
  • Investment tax planning
  • Year-end planning strategies.

Investment tax planning involves evaluating how best to position assets in order to minimize the amount of taxes you have to pay on an ongoing basis. This requires year-round planning, and it begins with an in-depth understanding of the tax implications of various investments and investment strategies, including:

  • The treatment of wash sales
  • Tax-exempt investments
  • Gains and losses from securities sales
  • 1031 exchanges
  • Qualified dividends
  • Options strategies
  • Tax-deferred investing
  • Passive income and losses
  • Mutual fund taxation

If you give away wealth during life or at death, you may incur federal taxes—and possibly state taxes as well. These taxes include gift, estate, income, and inheritance taxes. You can help protect the assets you transfer from excessive depletion by understanding these taxes and the various strategies that are available to minimize them.

Tax issues are never far from the mind of business owners, and it’s likely that many of the decisions you make will be based on tax ramifications. It starts with the formation of your business and continues through its sale. The type of business entity you select (e.g., C corporation, S corporation, partnership, etc.), how you pay out profits to the owners, and your accounting decisions will all have an effect on your tax liability.

Significant life events—marriage and retirement, for example—come with tax considerations. We focus on these issues as well as on the stages of your overall financial plan.