The Whole Picture

I believe good financial planning looks at the whole picture. When it comes to managing investments, I want everything working together, including the tax bill.

Here are some strategies I use with clients.

Maximize Roth in down income years
If you happen to have a lower income year, take advantage of the lower tax rate. Converting tax-deferred money at a lower rate than you'd typically pay is a window worth taking seriously.

Asset location, choosing the appropriate account where the investment goes
Income-producing investments like bonds (fixed income) go in tax-deferred accounts. I utilize the Roth for investments with the largest growth potential. I use direct indexing strategies for certain clients in their brokerage account. This is a strategy where you own every underlying stock, giving you the advantage of tax-loss harvesting at the individual stock level. Particularly useful when you have gains to offset like a business sale, highly appreciated stock, or a concentrated position.

From a business owner standpoint
I make sure retirement plans are in place. If not, this is a great benefit for your employees and the costs to set up are low. There are even some tax credits available for startup plans. If a profit sharing plan and 401k aren't enough, I utilize a cash balance plan. These are basically building your own pension. You can defer quite a bit of income year after year.

One of the things I'm a believer in though is not letting the tax tail wag the dog. It would be like driving 100 miles to save money on gas. Is it worth your time and actual savings?

This isn't tax advice — just some good planning. For tax-specific guidance, work with your CPA.