Tax Planning Strategy Discussion

There’s an old joke that the difference between death and taxes is that death doesn’t get any worse when Congress goes into session. As administrations come and go, the tax rules change. And the rate of tax-rule changes appears to be accelerating. In fact, since 1940 there have been 80 major changes in tax legislation. Each time the tax rules change, your investment portfolio may be affected.

It’s critical to stay current with changes in legislation that may affect your tax liability. But as much as you are dying to read the tax code each year, it’s likely not feasible for your time schedule. Yet, you still have to make decisions about your investments; should I choose tax-favored investments or taxable investments?  

What’s more, we’re faced with numerous tax revenue streams that suck the dollars from our paychecks: federal income taxes, Social Security and Medicare taxes, even gift and estate taxes.  Then states jump in with state income taxes, sales taxes, and excise taxes on gasoline, tobacco, alcohol, and other products. Even local governments take their share in property taxes and sales taxes. Taken together, taxes can be a large burden, so it makes sense to try to manage every dollar in taxes that you can.

That’s why understanding tax strategies and managing your tax bill are an integral part of a sound financial approach. Conversely, ignoring the tax ramifications of your investment portfolio may result in lower overall performance. Some taxes can be deferred, and others can be managed through tax-efficient investing. With a careful and consistent preparation, you can potentially reduce the impact of taxes on your overall investment returns.

Sit down with our professionals who will analyze your tax liability and advise you on potentially profitable ways to go about your investing. The goal is to keep as much in your pocket as possible, while giving unto Caesar what is Caesar's.

*LPL Financial, EverVest and Stratos do not provide tax advice. Clients should consult with their personal tax advisors regarding the tax consequences of investing.