"If you're not weaving tax planning into your overall retirement and investment strategy, you're most likely leaving money on the table. And I'm not talking about the returns that show up on your 401(k) statement. Having a 401(k) or IRA doesn't mean you have a retirement plan. A proper financial plan is multifaceted-it incorporates investment strategy, tax optimization, estate planning, and risk management."
"With that in mind, here are five year-end tax planning areas to focus on. These are the low-hanging fruit-the opportunities that show up in my client base year after year. This isn't an exhaustive list, and not everything will apply to your situation, but chances are at least a few of these will be worth exploring. As always, consult your tax planning professionals before implementing any of these strategies. This outline is for educational purposes only."
"Tax-loss harvesting involves selling investments at a loss within your brokerage account to offset realized gains elsewhere in your portfolio. This can minimize your overall capital gains tax bill. Nobody invests hoping for losses, but they're inevitable. Historical analysis shows us that markets rise about 70% of the time, but the average intra-year drop is around 14% according to JP Morgan's Guide to the Markets research. Taking advantage of these dips can create tax benefits."
Perform year-end tax planning now to adjust 2025 taxable income and potentially save thousands. Integrate tax planning with retirement, investment strategy, estate planning, and risk management rather than relying solely on 401(k) or IRA contributions. Focus on practical year-end opportunities like tax-loss harvesting to offset gains, estimate placement within tax brackets, and pursue targeted account actions and gifting strategies. Recognize that not every tactic suits every situation and consult tax planning professionals before implementing changes. Small, timely adjustments can materially reduce tax liabilities and improve long-term financial outcomes.
Read at Above the Law
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