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Proactive Tax Planning

If you've ever found yourself asking questions like "How to lower my tax bill" or "Ways to reduce taxes in retirement,”  you're not alone. Tax planning is one of the most overlooked but impactful parts of the planning process. At DecisionPoint Financial, we believe in helping clients understand what’s in their control. And both proactive and reactive tax planning is high on that list.


So, What Exactly Is Tax Planning? 

Tax planning is not just something you do in April. It’s an ongoing, year-round process where we're looking ahead to strategize. It’s about more than just paying less in taxes today, it’s about looking at the whole picture and paying less over your lifetime, or even multiple lifetimes as we consider the next generation and if they inherit taxable or non-taxable assets. 

 We’re often asked things like:

  • “Should I do a Roth conversion this year?"
  • “Is tax-loss harvesting worth it?”
  • “How do I avoid the Medicare IRMAA surcharge?”
  • "Should I file an extension for my taxes?"
  • “Are capital gains taxes different in retirement?"
  • “How will the newest tax legislation affect me?” 

These are all tax planning questions—and they don’t have one-size-fits-all answers.


Examples of Tax Planning Strategies

Some of our most-utilized tax planning strategies include: 

Strategic Roth Conversions: Converting some of your pre-tax IRA dollars to a Roth IRA during lower-income years can be a way to manage long-term tax exposure. People often ask “When does a Roth conversion make sense?”  and the answer depends on the full picture of your income, goals, and timeline, all of which we consider when helping you make this decision.  

Tax-Efficient Withdrawal Strategies: If you're in or approaching retirement, how you take money out of your accounts (and in what order) can impact your annual tax bill. This is often referred to as “sequencing withdrawals”  or “tax-smart retirement income planning.”

Gifting and Donor-Advised Funds: Planning ahead for charitable giving, especially if you itemize, can help you get the most out of your donations. We help people understand how to give to charity while reducing taxes through strategies like gift stacking and using a donor-advised fund instead of direct giving. 

Donating shares of a business prior to sale: For business owners planning a sale, donating a portion of appreciated shares to a qualified charitable organization or donor-advised fund before the transaction can be a powerful strategy. When done right, this strategy allows you to "double dip" on tax savings, as you get both the deduction for the charitable contribution, and you no longer have to pay capital gains tax on the appreciation of that portion of the business. 

Maximizing the QBI deduction: For small business owners, the Qualified Business Income (QBI) deduction remains one of the most valuable tax breaks introduced by the Tax Cuts and Jobs Act, and it's a key component in the proposed “One Big Beautiful Tax Bill.” Offering up to a 20% deduction on eligible business income, this benefit can significantly reduce a business owner's tax liability. However, income thresholds and complex rules mean thoughtful planning is essential to capture the full advantage.

We regularly implement strategies such as maximizing retirement plan contributions (401(k), Profit Sharing, and Cash Balance Plans), optimizing W-2 wages for S corporations, and accelerating or deferring income to help clients stay within the optimal range. With proposed legislation potentially reshaping how the QBI deduction is calculated (or who qualifies), being proactive and informed is more important than ever. 

Managing Capital Gains and Losses: Selling investments at a loss to offset gains (aka tax-loss harvesting) can be a valuable strategy, especially in volatile markets. But it requires a clear understanding of timing, wash sale rules, and portfolio rebalancing, all of which we are well-versed in.  

Small Business and Self-Employed Tax Planning: For business owners, tax planning can also include entity structure decisions, retirement plan decisions (like setting up a Solo 401(k) or a SEP IRA), and key strategies when you’re ready to sell. If you’ve ever wondered, “How do I lower self-employment taxes?”  you’re thinking about tax planning.


Why It’s Ongoing 

The tax code is complex and always evolving. Legislation, life changes, retirement, and even market performance can all impact what the right strategy looks like for you, both this year and five years from now.

Proactive tax planning years before retirement can be one of the most valuable tools in a long-term financial plan. By looking ahead, we help clients identify opportunities to manage their income, reduce lifetime tax exposure, and align their financial decisions with upcoming changes in tax law. Whether it’s designing a withdrawal strategy, managing future required minimum distributions (RMDs), or navigating the impact of new legislation, early planning allows for more flexibility and better outcomes. Our goal is to help clients avoid surprises and make informed decisions with time on their side.

At DecisionPoint Financial, we take a year-round, personalized approach to comprehensive financial planning, which includes coordinating with your CPA or tax professional when needed. 

While we don’t offer tax advice or tax preparation services, we do think that thoughtful, forward-looking tax planning is one of the best ways to keep more of what you earn and align your money with your goals.

Have questions about your tax strategy?

Let’s talk. Give us a call at 480-553-6249 and connect with an advisor who can discuss your unique situation. 

— Your DecisionPoint Financial Planning Team —