Tax planning considers the tax implications of individual, investment, or business decisions, usually with the goal of minimizing tax liability. Although decisions are rarely made solely on their tax impact, you should have a working knowledge of the income or estate tax issues and costs involved.

A major goal of tax planning is minimizing federal income tax liability by:

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

Investment Tax Planning

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

  • The treatment of wash sales
  • Tax-exempt investments
  • Gains and losses
  • 1031 exchanges
  • Qualified dividends
  • Option strategies
  • Tax-deferred investing
  • Passive income and losses
  • Mutual fund taxation
  • Asset Transfer Planning 

If you plan to give away wealth--at any point during or after your life--you may incur federal taxes, and possibly state taxes as well, including 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 you can use to minimize them.

Business Planning

As a business owner, many decisions revolve around taxes. These kinds of decisions begin at the very beginning--the formation of your business--and continue through the sale. Your choice of business entity, how you pay out profits to the owners, and your accounting decisions will all impact your tax liability.

Life Event Planning

Some events in life—such as retirement—come with tax considerations. Life event planning focuses on the impact of significant events on your life, as well as on the stages of your overall investment plan.