AssessIn the tax preparation process, we will often find missed opportunities. Most people look to their investment adviser for returns on their money. This is an important quality, but sometimes tax avoidance can help one retain gains that they might have otherwise lost to taxes.

Recently a couple took a large distribution from their IRAs and paid off their home and made some upgrades to their property. This distribution caused a $2,000 taxable event because their income was significant enough that their Social Security for that year was also taxable. Had they simply taken half of the distribution one year and the other half the following year, their taxable event would have dropped to $0. The amount of interest paid on the mortgage for those six months would have been approximately $200. Mathematically speaking, the client would have been ten times better off had they been able to follow our advice.

You cannot go back in time and change the past. In tax preparation, we must examine what our clients did, not what they should have or could have done. Tax Planning is the process of helping people make tax-efficient decisions every year. We strive to do this with our clients. Basically, there are three places that one’s savings will go:

  1. – Client’s Estate
  2. – Charity
  3. – Taxes

Our default position is to help the client minimize taxes before, during, and after retirement.