The month of Taxtember is now over, I hope that you have taken advantage of some of the tips and strategies that we discussed this month to lower your tax bill.
I know within our office we are setting up four new Donor Advised Funds, $500,000 in ROTH Conversions, and increased contributions in clients ROTH, SIMPLE, and 401k. Also, we have over $500,000 in tax loss harvesting trades that will benefit our clients.
So the last step for Taxtember is developing an action plan to lower your taxes. You really need a strategy to map out what your taxes will be for 2020 and also do a forecast 2021 and 2022 (no matter who is in the White House). Working with a tax preparer should be the second person you talk with about these various strategies. You really need to work with a Fiduciary Advisor since they have access to your investment portfolio and should have an idea about your personal financial statement. Provide the advisor with a copy of your 2019 1040 Tax Return and any material changes for 2020. Then review the various items that we have discussed this past month and how your 2020 1040 will be impacted. Some of the strategies will work well together. Or, use one the strategies for this year and set up to use another one for next year. At Oldfather Financial, we have tools and software that will easily show you the various ideas that we are suggesting and how it will impact your taxes.
Once your Fiduciary Advisor and you have a plan, then meet with your tax preparer to get their advice on these strategies since they will be the ones putting the plan into action on your tax returns. If your broker isn’t comfortable with providing tax suggestions, or maybe you just need a second opinion, then START HERE.
PS American Funds has released their estimated 2020 Capital Gain distribution. Several of their funds are projected to have large capital gains distributions. If you hold American funds in a taxable account, contact us about strategies to lower their tax impact.