Tax Minimization

What you need to know

Taxes. No one wants to think about taxes, or deal with them, but handling them correctly may save you a significant amount of money come tax season.

Tax planning goes beyond just filing your returns. It’s about understanding how your financial decisions impact your taxes and finding ways to strategically minimize what you owe, allowing you to keep more of your hard-earned dollars – yes!

Why Work With a Tax Expert as Part of Your Overall Financial Strategy?

Tax laws change frequently. The IRS doesn’t make things easy, and tax laws are always evolving. That’s why it’s beneficial to work with someone who dedicates their entire career to understanding taxes and staying updated on the latest changes, so you don’t have to!

Tax planning is a year-round activity. Most people think about taxes only when it’s time to file, but you should consider them throughout the year to make better financial decisions. Many tax-saving opportunities need to be taken advantage of before the year ends, so waiting until you file might cause you to miss out (and we strive for NO FOMO around here!) <link to no fomo intro blog>

Identify all possible deductions and credits. A tax professional who knows your financial situation can suggest all the deductions and credits you qualify for. Deductions lower your taxable income based on certain expenses you’ve paid. Some common deductions include:

  • Mortgage interest
  • Charitable donations
  • State and local taxes
  • Student loan interest
  • Medical expenses
  • Business expenses
  • Retirement contributions

Tax credits, on the other hand, directly reduce the amount of tax you owe. Some common credits are:

  • Earned Income Tax Credit (EITC)
  • Child Tax Credit
  • American Opportunity Tax Credit
  • Lifetime Learning Credit
  • Child and Dependent Care Credit
  • Retirement Savings Contributions Credit
  • Premium Tax Credit
  • Saver’s Credit
  • Foreign Tax Credit
  • Research and Development Credit
  • Energy Efficiency Tax Credits

What Other Tools Might a Tax Pro Suggest to Limit My Tax Exposure?

When you work with a tax planning expert, several strategies may be utilized to offer you opportunities to lower your tax exposure and, therefore your overall tax liability, such as:

  • Tax-advantaged retirement plans. Plans like 401(k)s and IRAs offer tax benefits you should utilize if you can.
  • Tax-advantaged investments. Investments like municipal bonds can help you reduce your tax liability.
  • Tax-loss harvesting. This involves selling investments that have lost value to offset gains from other investments. While long-term investing is generally recommended, there are times when selling at a loss is beneficial.


Sum It Up For Me… Do I Really Need a Tax Pro on My Financial Team?

Working with a qualified tax professional is crucial. They can create a tax plan tailored to your needs, helping you minimize what you owe. The more complex your financial situation, the more impact tax planning can have on your wealth management.

Clients of Rely Wealth gain access to our network of financial professionals, allowing you to take advantage of our trusted relationships and unique expertise. Taxes are inevitable, but don’t have to be a burden if you work with the right team, at the right time. 

DISCLOSURE: Investment advisory services offered through Rely Wealth Partners, LLC, a DBA of tru Independence Asset Management, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.

We work with highly motivated individuals and families who want to be financially complete and value clarity.

Daniel Mauser — Founder and Managing Partner