Tax Planning – An Integral Part of Wealth Management

When it comes to tax planning, nothing is simple. For example, first you need to consider your marginal tax rate — this is the regular rate you’ll pay on your next dollar of “ordinary income” (salary, business income, interest and more).

Then there’s the alternative minimum tax (AMT), which was designed to ensure wealthy taxpayers with “excessive” deductions would pay some income tax. The top AMT rate is lower than the top regular income tax rate on ordinary income. But the AMT rate typically applies to a higher taxable income base. So if you plan only for regular income taxes, it can result in unwelcome tax surprises.
You also need to consider the various tax deductions and credits that could save you taxes. On the other hand, income-based phaseouts and other limits can reduce or eliminate the benefits of these breaks, effectively increasing your marginal tax rate.

That’s why, no matter what your situation, it’s important to review your income, expenses and potential tax liability throughout the year, keeping in mind the many rates and limits that can affect income tax liability — and keeping an eye out for additional tax law changes. Only then can you time income and expenses to your advantage.

One of the most beneficial areas of expertise we offer to our clients is tax planning. With a seasoned tax expert on our team in Tim Agnew, and consistent monitoring of the potential tax implications on investments, we are able to provide a well-rounded tax-inclusive approach to wealth management that can both limit our clients’ tax liability and provide efficient investing as they strive to meet their financial goals.

Read more about tax planning in this section of our online tax guide.