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  • Poterack Capital Advisory

Tax Planning Goes Well Beyond April

This is the time of year we all think about income taxes. Will we owe or will we get a refund? What can I do to minimize my taxes? Of course there is very little you can do at

this point to change your 2023 taxes. Tax planning is done proactively over many years so you pay your fair share and nothing more.


Investments and savings can be taxed in many ways. There is a tax advantage to owning your riskier investments like stocks outside of a 401k or traditional IRA. In some income tax brackets, ordinary income tax on stock market gains withdrawn from a 401k or traditional IRA is twice as high as long-term capital gains tax rates on those same stock market gains when held outside of a 401k or traditional IRA. Therefore, it is tax efficient to own more conservative investments and savings in your401k or traditional IRA.


If you intend to give to your church or charities, there are several tax-efficient ways to do so versus giving cash or a check.  Giving appreciated securities, establishing a Donor-Advised Fund (DAF) or if qualified, a Qualified Charitable Distribution (QCD) may maximize your charitable giving.


For some people tax deferral will turn out to be a real boondoggle. Deferring taxes may feel good in the short-term, but if tax rates go up in the future as some predict, you may

wish you had already paid taxes at today’s lower rate. This is particularly true if you are married now, lose your spouse, then realize you must file as a single person whereby

every higher income tax bracket kick in quicker for single filers versus married filing jointly.


We employ a strategy called “tax-loss harvesting” with after-tax accounts seeking to minimize capital gains taxation.


The biggest hurdle to improvement for many is the habit of doing the same thing every year. While investing involves inherent uncertainty, good tax planning may improve your bottom line simply by reviewing the specific facts of your situation and taking action.

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