Tax Planning

All things being equal, we would likely recommend an approach that minimizes current income taxes. We are sensitive to income tax issues but not a slave to them. There is no amount of capital gain that warrants staying in an inappropriate investment. For one thing, capital gains taxes are presently at historical lows. As we sometimes tell our clients, "If you don't like the capital gain now, will you like it better when it's a capital loss?"

At oXYGen Financial, we will work closely with you and your tax advisor to help you take advantage of strategies that help you avoid paying unnecessary taxes.

While decisions are rarely made solely on their tax impact, you should have a working knowledge of the income or estate tax issues and costs involved.

A major goal of tax planning is minimizing federal income tax liability. This can be achieved by:

  • Reducing taxable income through income deferral or shifting
  • Deduction planning
  • Investment tax planning
  • And year-end planning strategies

Investment tax planning involves evaluating how to best position assets in order to minimize the amount of taxes you have to pay on an ongoing basis. This requires year-round planning, and it begins with an in-depth understanding of the tax implications of various investments and investment strategies, including:

  • The treatment of wash sales
  • Tax-exempt investments
  • Gains and losses
  • 1031 exchanges
  • Qualified dividends
  • Tax straddles
  • Tax-deferred investing
  • Passive income and losses
  • Mutual fund taxation

If you give away wealth, during life or at death, you may incur federal taxes—and possibly additional state taxes. These taxes include gift, estate, income, and inheritance taxes. You can help protect the assets you transfer from excessive depletion by understanding these taxes and the various strategies you can use to minimize them.

Tax issues are never far from the mind of the business owner, and it's likely that many of the decisions you make will be tax-based. It starts with the formation of your business and continues through the sale. Your choice of business entity, how you pay out profits to the owners, and your accounting decisions will all have an effect on your tax liability.

Some events in life—retirement, for example—come with tax considerations. Life event planning focuses on the impact of significant events on your life, as well as on the stages of your overall investment plan.

This material is not intended to replace the advice of a qualified attorney or a tax advisor. Before making any financial commitment regarding the issues discussed here, consult with the appropriate professional advisor.

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