Three Year-End Planning Moves You Must Do This Year

Friday, September 13, 2013 13:49
Three Year-End Planning Moves You Must Do This Year

Tags: tax planning | Tax-efficient investing | year end tax planning

Tax laws have changed and our clients are facing higher taxes than they’ve had in decades. They don’t understand the ins and outs. So, if they are surprised, they’re going to be looking at you and wondering why you didn’t help them.  Of course, advisors should be applying tax-wise strategies in their clients’ portfolios all during the year.  But, this year – more than ever – advisors need to consider year-end planning.

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Here are three year-end planning moves you need to consider:

  1. Meet with your clients.  Even if you can’t save them money, you need to proactively set up appointments and go through year-end calculations and strategies.  Your clients will know what to expect in April and they will know that you are looking out for them.
  2. Harvest tax losses.  It doesn’t matter whether or not they have capital loss carryforwards; the carryforwards never expire. And, they come in handy when gains are ultimately recognized in their portfolios.  With higher capital gains tax and Medicare surtax, saving taxes now or in the future will be valuable to your clients.
  3. Consider Roth conversions.  Don’t forget to check on your clients’ tax brackets.  If they are in a low bracket, convert IRAs to Roth IRAs.  The permanent avoidance of tax on gains and exemption from Required Minimum Distributions make this move a win-win.

As your clients’ trusted advisor, you can’t always produce high investment returns. Ongoing proactive advice will ensure that your clients stick around.

Comments (1)

Great reminder how the best planning is always the basic building blocks.
holtby , September 30, 2013

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