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.

Up to 15%
reduction in lifetime
tax burden from proactive planning
01 Investments02 Retirement03 Tax Planning04 Insurance05 College Savings06 Home Purchase07 Emergency Fund08 Budgeting09 Other Goals
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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)
Upper income threshold per bracket · Married Filing Jointly · 2024
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