Maximizing Wealth Preservation After Tax Season: What To Do Post-Filing
As the tax filing deadline approaches, many individuals are focused on finalizing their returns. At Entrust Wealth Partners, we believe that true wealth preservation extends far beyond the April filing date. The most successful wealth management strategies leverage tax season as a springboard for year-round financial optimization.
Read on to learn important last-minute filing considerations you should take into account as well as post-filing strategies to maximize your wealth.
Last-Minute Tax Filing Considerations
Even as we approach the deadline, several important considerations deserve attention:
Extension Strategies: If your financial situation involves complex investments, business interests, or international holdings, a strategic filing extension may be beneficial. This may be true if you need more time to gather documentation for complex investments, are dealing with significant life changes like business sales or inheritances or are in the process of implementing tax-advantaged retirement contributions. However, remember that while extensions provide additional time to file, they don't extend payment deadlines. Ensuring proper estimated payments can help you avoid penalties while gaining time for thorough documentation and review.
- Required Minimum Distribution Verification: For those over 73, verify that all Required Minimum Distributions from retirement accounts were properly taken and reported. The penalty for missed RMDs remains substantial at 25% of the amount that should have been withdrawn.
- Foreign Asset Compliance: Ensure all Foreign Bank Account Reports (FBARs) and other international disclosures are properly completed. The penalties for overlooking these requirements can be severe, with potential fines reaching $10,000 per violation even for unintentional oversights.
Often-Overlooked Deductions: High net worth individuals frequently miss specialized deductions, including investment management fees, qualified business income deductions, and certain professional development expenses. A thorough review can identify these opportunities before filing.
Note: If you or the tax professional you are working with are unsure whether any of these considerations apply to your filing, feel free to reach out to our team to discuss your specific situation.
Post-Filing Strategic Assessment
Once your return is filed, the real strategic work begins. If you’re already working with a member of our Entrust Wealth Partners team, be sure to share a copy of your final return with us. From there, we’ll work to help you through:
Tax Return Intelligence: Your completed return contains valuable data that can inform your wealth management strategy. We’ll analyze things like your effective tax rate, income sources, and deduction effectiveness to identify optimization opportunities for the coming year.
- Investment Tax Efficiency Analysis: We’ll review the tax impact of your investment portfolio. Are your assets optimally located across taxable, tax-deferred, and tax-free accounts? Could alternative investment structures provide better after-tax returns? While we’re always looking at the most tax efficient investments throughout the year, your tax return gives us a great opportunity to understand if bigger picture changes to your strategy are beneficial.
Charitable Strategy Reassessment: We’ll review your charitable giving to ensure you’re continuing to achieve the desired tax benefits. For many high net worth clients, strategies like donor-advised funds, qualified charitable distributions, or charitable trusts may offer improved efficiency in which case we surface these recommendations for your consideration.
To conduct a comprehensive post-filing analysis, connect with your Entrust Wealth Partners advisor. Our team can translate your tax return into actionable wealth preservation strategies.
Mid-Year Tax Planning Opportunities
The middle of the year presents several unique planning opportunities:
Roth Conversion Evaluation: After the first quarter market movements, this may be an opportune time to consider Roth conversions, especially if your income or portfolio values have fluctuated. The tax impact of converting traditional retirement assets to Roth accounts can vary significantly based on market timing and tax bracket management.
- Proactive Tax-Loss Harvesting: Rather than waiting until year-end, implementing a quarterly tax-loss harvesting strategy can capture market volatility throughout the year. This approach can help offset capital gains while strategically repositioning your portfolio.
- Business Structure Review: Recent tax law changes and court decisions continue to impact the advantages of different business structures. Mid-year is an ideal time to evaluate whether your current business entity structure remains optimal for your situation.
Estate and Gift Planning Updates: With ongoing discussions about potential changes to estate tax exemptions, reviewing and potentially accelerating your wealth transfer strategy may be recommended. The annual gift tax exclusion remains an effective wealth transfer tool that requires regular attention.
These strategies often require thoughtful consideration of your complete financial picture. Your Entrust Wealth Partners advisor can help you assess which opportunities align with your wealth management goals.
The Entrust Approach to Tax-Integrated Wealth Management
At Entrust Wealth Partners, we believe that effective tax planning cannot occur in isolation. Our approach integrates tax considerations with your broader wealth management strategy, including investment management, retirement planning, estate planning, and philanthropic goals.
This holistic perspective allows us to identify opportunities that might be missed when viewing tax planning as a standalone activity. By considering the complete picture of your financial landscape, we can help you make decisions that optimize your overall wealth, not just your tax situation.
Take Action
We invite you to connect with a Entrust Wealth Partners advisor to discuss your 2025 tax strategy. Whether you're looking to implement sophisticated tax planning techniques or simply ensure your current approach remains optimal, our team is ready to help you navigate the complexities of wealth preservation in today's environment.
Contact us today at (860) 838-3730 or email us at entrust@entrustwp.com to schedule a conversation about your wealth planning needs.
Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
Entrust Wealth Partners and LPL Financial do not provide tax advice or services. Please consult your tax advisor regarding your specific situation.
