It’s important to embrace tax planning throughout the year and over time as it’s a dynamic tool for wealth optimization, applicable to everyone at every stage of life and across all income levels. By aligning strategies with financial goals, tax planning becomes a catalyst for security, growth and legacy.
Why tax planning matters
• Broad relevance — Proactive planning helps maximize savings, fund life goals and reduce stress.
• Annual opportunity — Shifting laws, personal changes and time-sensitive opportunities (i.e., retirement contributions) demand regular review to optimize through revised strategies.
• Wealth accumulation and preservation — Starts with your first paycheck, through foundational steps like retirement contributions and beneficiaries, for all earners. For higher-net-worth individuals, sophisticated strategies like trusts and charitable giving may help mitigate estate taxes and protect intergenerational wealth.
Thinking about tax planning
• Reframe it as wealth building — Saved taxes can fund investments, retirement or passions.
• Envision the personal impact — See how tax-planning strategies align with goals (i.e., educational funding, earlier retirement).
• Seek counsel from your tax advisors — Turn to your relevant advisors to demystify any concepts and help create a plan toward optimizing your wealth.
Strategies are as varied as your goals
Just as life situations and goals change, so do tax-planning strategies. You will need to consult and plan with your tax, legal and financial advisors. It is important to note that many tax-planning strategies are heavily dependent on the nature and amount of your taxable income while others are more dependent on your personal net worth. Below are some potential tax-planning topics to ask about at varying levels of wealth.
Under $500,000 net worth
• Tax-advantaged accounts, like retirement and health savings accounts
• Standard deductions and tax-loss harvesting
• Basic estate planning strategies (i.e., wills, beneficiaries, annual gifting)
Above $500,000 net worth
• Charitable giving strategies and mortgage interest optimizations
• Advanced estate planning strategies (i.e., trusts, lifetime gifting)
• Business owners: bonus depreciation and qualifying deductions
Above $10 million net worth
• Capital gains deferral investing opportunities
• Advanced wealth transfer options
• Strategic liquidity solutions
Above $20 million net worth
• Private foundations
• Basis step-up strategies for appreciated assets
• Harness strategic liquidity opportunities
The financial advisor’s role
Financial advisors guide your wealth planning and can help integrate tax-aware strategies (e.g., taxefficient investing). They can work alongside your tax attorneys for specialized advice. A team approach helps with holistic, compliant planning.
Final takeaway
Tax planning is a year-round, goal-driven process that empowers you to take control of your financial future. Combining proactive strategies and collaboration can serve as a cornerstone toward security, opportunity and legacy.
Connect with your financial, tax and legal advisors to develop, implement and review your tax-planning strategies.