Hey Mr. Tax Man

Over the past 15 years of working with clients from all tax brackets, there seems to be a common theme: How Can I Reduce My Tax Burden?

In recent years, more and more clients are looking for ways to not only reduce taxes, but also to take control of their finances, plan for retirement, and create wealth for themselves and their families. Through Four15 Advisors, Eric is able to help clients plan effectively to help reduce their tax liability. Now, through his fee-only firm, Financial Futures, Eric is able to take that a step farther by offering comprehensive financial planning that addresses tax issues, retirement planning, student loan optimization, debt management, cash flow analysis and more… Please feel free to setup a discovery call by clicking HERE.

Strategies to Consider

It seems that the more taxes someone has to pay, the more incentive exists to focus on tax-efficient strategies. Sometimes this includes techniques to reduce pre-tax income and sometimes the goal is to produce tax-free growth. Of course, taxes are just one consideration among many when making investment or income decisions.

Here are some considerations for those taxpayers from an investment perspective. Look for ways to invest that may potentially minimize your taxes.

Use capital losses to offset capital gains. Don’t put the cart in front of the horse – so don’t let a tax decision dictate an investment decision. But if it makes sense for your plan, selling stocks at a loss can reduce your taxable capital gains and adjusted gross income – potentially limiting your tax burden.

Start the retirement planning sooner than later. I don’t know about you, but I don’t want to have to work for my entire life. Make sure that you’re taking advantage of retirement vehicles to both reduce your taxable income and/or grow tax-free.

Diversify, Diversify, Diversify. It’s great that you’re taking advantage of your company’s match program in their 401(k) plans, but what else are you doing? A healthy product portfolio can be tax-efficient, but don’t put all of your eggs in one basket. We’ve all seen how quickly a nest egg can crack with the potential volatility of the market. Odigo Financial provides investment management services to make sure you’re putting your money where your mouth is.

Income considerations. Look for ways to manage your taxable income.

Max out tax-advantaged savings opportunities. If you are getting matches from your employer, there’s even more good reason to maximize contributions to qualified accounts, such as 401(k), 403(b), HSAs, SEPs and Keoghs. Qualifying contributions to these accounts can reduce your AGI, which can possibly reduce your tax liability. Also, the tax-free growth on certain life insurance policies can add an additional level of stability in addition to numerous tax savings down the road.

Protect Your Income. An oft-overlooked part of the investment process is insuring yourself against unforeseen circumstances. What good is growing your wealth if your income disappears and you have to start spending it pre-maturely?

Some sobering statistics

  • More than 1 in 4 of today’s 20 year olds will become disabled before they retire
  • 71% of Americans employees live from paycheck to paycheck
  • 54% of married households with children under 18 want to speak with a financial professional about financial services or products

To learn more about the financial services provided by Odigo Financial, email eric@odigofinancial.com or click the link below to setup a free 30 minute phone consultation.

 

When I moved from NY to LA, I was worried that it might be a hassle to work with a tax advisor on the opposite end of the country, but it could not have been easier. 2 stamps, 10 minutes on the phone, and a directly deposited return in what seemed like only a few weeks.
—S.L. Los Angeles, CA