Service 03 — Fee-Only · Fiduciary · Minnesota

Income Tax Planning

Proactive tax strategy integrated into your financial plan — Roth conversions, tax-loss harvesting, and year-round coordination.

$24K
average annual savings
from proactive tax planning
01 Investments02 Retirement03 Tax Planning04 Insurance05 College Savings06 Home Purchase07 Emergency Fund08 Budgeting09 Other Goals
Planning PrincipleFill lower tax brackets to avoid future higher tax brackets. Taxes are your largest lifetime expense — treat them that way.
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Taxes are your largest lifetime expense. Most financial plans barely touch them.

A typical financial plan focuses on asset allocation, retirement projections, and maybe insurance. Tax strategy is treated as a separate exercise — something your accountant handles in April.

That separation is expensive. Decisions made in your investment accounts affect your tax bracket. Decisions made in your retirement plan affect your Medicare premiums a decade later. Everything is connected, and tax consequences flow through all of it.

We treat tax planning as a year-round discipline, not an annual filing exercise. The goal is to minimize lifetime taxes — not just this year's bill.

2024 Federal Tax Brackets (Married Filing Jointly)
Understanding where your income lands shapes every planning decision
Income Events
Salary / W-2
Business income
Investment gains
IRA withdrawals
Social Security
Tax Levers We Pull
Account type selection
Roth conversions
Tax-loss harvesting
Deduction timing
Income deferral
Deductions & Credits
Standard vs. itemized
HSA contributions
Retirement contributions
Charitable bunching
QBI deduction (biz)
Result
Lower taxable income
Lower effective rate
More after-tax wealth
Smaller RMDs later
Lower Medicare costs
The Three Account BucketsWhich type of account you use — and when — determines your lifetime tax bill
Pre-Tax
Pay taxes later
Traditional 401(k), IRA, SEP-IRA. Contribution reduces taxable income now. All withdrawals taxed as ordinary income. Best when future rates are lower than today's.
After-Tax (Roth)
Pay taxes now, never again
Roth 401(k), Roth IRA. No deduction today. Qualified withdrawals completely tax-free — forever. Best when future rates are higher than today's.
Taxable
Maximum flexibility
Brokerage account. No contribution limits. Dividends and gains taxed annually, but at preferential long-term rates. Step-up in basis at death eliminates embedded gains.
The Roth conversion opportunity.For many clients, the years between retirement and age 73 — before RMDs and maximum Social Security — represent a low-income window. Converting pre-tax funds to Roth during that window, at lower rates, can reduce lifetime taxes by tens of thousands of dollars.
Same Gross Contribution — Three Different After-Tax Outcomes
$10,000 invested for 30 years at 7% · 24% tax bracket assumed
Tax-Loss HarvestingTurning market declines into tax savings

When investments in a taxable account decline in value, selling them realizes a capital loss — which can offset capital gains elsewhere, or up to $3,000 of ordinary income per year. The position can be immediately replaced with a similar (but not identical) investment, maintaining market exposure while banking the tax benefit.

This strategy doesn't change your long-term return — it changes when you pay taxes. Deferring gains for decades and harvesting losses as they appear creates a measurable tax alpha of 0.2% to 0.5% annually, depending on market conditions.

Example
You hold a large-cap fund with a $15,000 unrealized loss after a market correction. We sell it, bank the loss, and immediately buy a similar but different large-cap fund to maintain your allocation. The $15,000 loss offsets $15,000 of realized gains elsewhere — saving $3,300 in federal taxes at the 22% rate. Market exposure: unchanged.
Tax-Loss Harvesting Value Over Time
Cumulative tax savings from systematic loss harvesting in a $500K taxable portfolio