Tax Efficiency

“Tax Efficiency” simply means finding ways to keep more of your wealth working toward building your legacy, with less of it being lost along the way to taxes. Some efficiency strategies have more immediate impact, and some are focused on a much longer time horizon.

Tax efficiency starts with the type of account:

  • Retirement plans and individual retirement accounts give you tax control by letting you defer or pre-pay taxes
  • Education and health savings accounts let you eliminate capital gains taxes when the assets are used for eligible purposes

Next comes the sort of assets you invest in. Many asset classes have specific tax treatments to motivate people to invest in them.

  •  Government and municipal bonds offer tax-free income
  • Some assets share depreciation and expenses to reduce taxes
  •  Long term vs short-term investing periods affect tax treatment
  • Programs incentivize investment by providing step-ups in cost basis to reduce or eliminate future gains taxes

Estate level strategies look to transfer ownership sooner:

  •  Some assets may have a lower current valuation and large growth potential
  • Growth can occur outside of your estate and not be taxed as part of it
  • Proper use of trusts can get you a charitable deduction while still providing access to income
Some strategies get much more in-depth, combining several strategies at once.
We help you evaluate strategies holistically, figuring out which ones meet your needs best. Determining the right combination of strategies over long period of time really make a big difference.