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“Passionate about finding harmony between personal values and finances which leads to financial freedom.”
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5201 Great America
Parkway, Suite 320
Santa Clara, CA 95054
Phone: 408-657-6880
Fax: 408-273-6390
Skillful Tax Management for Life
Too many people put off thinking about taxes until it’s time to prepare their return and thereby miss opportunities to minimize their tax bill. Even those who do think ahead rarely look no further than the next year. We think that the best way to minimize your tax bill and free up dollars you can use to achieve your goals is to engage in long-range tax planning.
The key to all successful tax planning is to identify the tax implications of your financial decisions, and nearly all financial decisions have a tax consequence. As your holistic financial advisory firm, we are in the perfect position to help you structure your finances for the greatest tax benefit. We’re not talking about wild tax schemes or illegal tax dodges. We’re talking about legally minimizing the taxes you pay through a cohesive plan which addresses issues like:
- How to structure your investment portfolio to produce a higher after-tax return;
- How to minimize or avoid the Alternative Minimum Tax;
- When to exercise stock options;
- Whether a Roth conversion makes sense for you;
- What the right retirement plan is for your small business;
- How much house to buy and how much to finance;
- Whether going back to work after childbirth makes financial sense; and of course,
- How to identify all the tax deductions you are lawfully entitled to.
Of course, all the great planning we can do is for naught without communication and coordination with your tax preparer. That’s why we continue to build alliances with reputable CPA firms and act as liaison with your tax preparer. Every year, we will:
- Project your tax liability;
- Provide you with a letter for your preparer that summarizes your important tax information and details the tax deductibility of our fee;
- Review your tax return (before you file it) and compare it to our projections to identify any major discrepancies.
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Helping Ted and Elaine Ted was an engineer, and Elaine was a self-employed interior designer. They were good savers and were happily anticipating an early retirement…until their 401(k)s became 201(k)s and half of their equity in their home disappeared. Now they just feel stuck. When Ted and Elaine started working with a holistic financial advisor, it quickly became apparent that they could get back on track toward their goals if they stopped overpaying their taxes. They needed both short-term and long-term tax planning. The analysis of their investment portfolio revealed not only that were they holding some very tax-inefficient mutual funds but also that the after-tax return on their investments could be boosted by better asset location. Streamlining their portfolio would require selling some inherited stock at a substantial gain, but after calculating the cost basis it was discovered that they could harvest capital losses to offset much of the gain. They could also avoid some capital gains tax by replacing their cash charitable contributions with gifts of appreciated stock and putting the cash to work in their portfolio. Elaine was surprised to learn that she had not been taking all of the business deductions available to her. Like many small business owners, she had never thought about how many of her activities and expenses involved clients, prospective clients, referral sources, and research. She was also pleasantly surprised that because of the business planning provided by her holistic financial advisor, a portion of her advisor’s fee would be deductible as a business expense – saving her both income taxes and self-employment taxes. After further discussions about their goals, Ted and Elaine decided to use their tax savings – to pay taxes! Their situation indicated they would benefit in the long term by taking advantage of the opportunity to roll over their traditional IRAs to Roth IRAs regardless of their income. While they would owe taxes now on the amount rolled over, they would never have to pay any additional tax on the future growth of those investments. Ted and Elaine had never realized how the taxes they paid were so affected by the financial decisions they made in all areas of their life. They were amazed at how quickly they started reaping the benefits of skillful tax planning. They’re feeling back on track and excited that as they start dealing with decisions about when to retire, when to downsize their house, when to purchase long-term care insurance and more, they’ll have someone on their side, helping them make smart financial and tax decisions. |
Put more of your money to work for you today. Contact us to see how making smarter financial decisions can help you minimize your taxes and maximize your future.
Certified Financial Planner Board of Standards Inc.
owns the certification marks CFP®, CERTIFIED FINANCIAL
PLANNER™ and
in the U.S., which it awards to individuals who successfully complete
CFP Board’s initial and ongoing certification requirements.