Annual Tax Strategy Development

A tax preparer looks backward. They review what happened during the year and calculate what you owe based on your income and activity. A tax strategy is forward-looking both short- and long-term tax impacts and helps identify the most effective ways to minimize taxes or anticipate what your tax picture will look like ahead of time.

Yes. Building a tax strategy early in the year is ideal. Understanding your fundamental spending needs, how much cash you’ll need readily available (without tax penalties), and which employer benefits you can use, such as Traditional or Roth 401(k), HSA, FSA, and others, all work together to shape the most effective tax plan for the year ahead.

Tax-deferred savings can be valuable, but they’re not always optimal once your balances grow large. If you’ve already accumulated $3–4 million or more across your IRA and 401(k), and depending on how close you are to RMD age, your future retirement income, including Social Security, any pension, and required minimum distributions, may keep you in the highest tax bracket for life. If you plan to leave assets to your children, Roth savings can be especially powerful. Inheriting Roth IRA or Roth 401(k) assets gives them up to 10 years of tax-free growth before they must withdraw the funds. For many high net worth families, blending tax-deferred and tax-free savings creates a more efficient long-term strategy.

High-income earners can still contribute to an IRA even if they make $1 million or more per year. They simply cannot deduct the contribution on their tax return. If your traditional IRA has a $0 balance, you can contribute the annual maximum and then convert that amount to your Roth IRA. This “backdoor” approach moves after-tax dollars into a tax-free account, where the savings can grow tax-free for as long as you keep it invested.