The Importance of a Full Tax
Review with a Financial Plan

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We believe

tax planning should be a repeatable systematic process to optimize the changing tax laws
with the changing circumstances in our client’s lives. Every year we have an annual review meeting
which typically results in tax saving for the current year, along with tax strategies to implement in
future years.

 

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STANDARD DEDUCTION VS. ITEMIZED DEDUCTION 

The new tax rules increased the Standard Deduction and changed the Itemized Deduction
rules. As a result, it is becoming more difficult for taxpayers to take advantage of deductions.

CHARITY PLANNING

There are ways to deduct charitable contributions even with the new limiting tax rules.

 

Donor Advised Fund
Utilizing a donor advised fund is one way to take advantage of getting an
upfront charitable deduction while avoiding capital gains.

Charity via RMD
Another planning strategy to contribute money directly from your IRA to charity
(Note, this only applies for taxpayers over age 70 ½ who have a Required Minimum Distribution requirement.)

 

DEDUCTIBLE IRA OR A ROTH IRA?

What is the difference and which is best for you? There are different eligibly rules for you
and your spouse depending on your work status and income.

401(K) PLANNING

Questions to ask:

  • Did you contribute enough to get the full company match?

  • Did you maximize your contribution?

  • Are “Deductible” or “Roth” contributions best for you?

  • If you are close to retirement should you consider “After-Tax” contributions?

  • Do you have your beneficiaries titled correctly so that they can benefit from
    the ‘stretch IRA rules’?

HEALTH SAVINGS ACCOUNT

If you have a ‘high deductible’ health insurance plan then you are eligible to contribute to
an HSA. This is the only investment in the tax code that is triple tax-exempt.

ROTH IRA CONVERSIONS

We consider Roth IRA conversions in years you may be in lower tax brackets. In our
experience a lot of people have a window post retirement where they can take advantage
of IRA/401(k) Roth IRA conversions in coordination with their Social Security benefits.

SOCIAL SECURITY PLANNING

There are many strategies to consider that affect your income taxes and lifetime
benefits for you and your spouse.

STATE TAX PLANNING

States have unique tax considerations, for example in South Carolina:

 

South Carolina Tax Credits
Taxpayers have the ability to purchase tax credits for a discount from other taxpayers

SC 529 Education Plans
South Carolina residents can deduct contributions into this plan and funds grow tax-free!

 

 These are just a few of the tax planning opportunities
we analyze in our clients financial plan. If you are not
currently proactive with your personal tax planning,
now is a good time to start!