As Benjamin Franklin once famously said, “In this world nothing can be said to be certain, except death and taxes.” With the April 15 tax deadline approaching, it’s a good time to think about your finances – and get your financial plan and paperwork in order. With that in mind, we thought it would be helpful to share some of our most commonly asked questions around taxes.
How can I maximize my tax savings — and keep more of my hard-earned money?
Many people are feeling concerned about the economy, with recent stock market drops, prices soaring, and newly imposed tariffs. Our clients have been asking how they can maximize their tax savings so they can keep more of their money rather than giving it to Uncle Sam.
One of the best ways to do this is by increasing your retirement account contributions, such as contributing to a 401K. This is a smart (and easy) way to save on taxes. Traditional 401K and IRA contributions are typically made with pre-tax dollars, reducing your taxable income. Traditional IRA contributions will lower your taxable income for the current year, and you won’t pay any taxes on these contributions until you withdraw the money. Roth IRAs, on the other hand, are taxed upfront, which means they won’t lower your taxes for this year, but the distributions and earnings you take when you retire will be tax-free.
If you own a business, consider establishing a pension plan to go along with a 401K. You can provide a valuable benefit for your employees while substantially increasing the amount (and tax deductions) you set aside for yourself. In addition, the tax savings on your contributions might be enough to fund the benefit for your employees.
Besides retirement contributions, how can I lower the amount I have to pay in taxes?
Manage your portfolio wisely and efficiently – particularly when the market is strong – which can help you save money on taxes. If you have a reasonable sized portfolio – $500K or more – and you own individual stocks instead of mutual funds, you can avoid significant taxes. Mutual funds require you to pay gains, but with stocks, you can manage your gains against losses. Consider using tax-loss harvesting, which means selling stocks at a net loss to reduce capital gains taxes.
What about real estate investments? Can they help me save money on taxes?
Yes, indeed. At Guyton Forge, we believe in real estate – such as rental properties, apartments, land, or commercial buildings – which can help build wealth. This also offers significant tax incentives. Investment property owners can take a variety of deductions, including costs associated with mortgage interest, property tax, operating expenses, depreciation, and repairs. On the other hand, homeowners can benefit from the personal-residence exemption, which protects their home sale profits from capital gains taxes.
I own my own business. Does that provide any tax benefits?
Yes! Owning a business may result in some potential tax advantages. For instance, numerous business expenses are potential tax write-offs, including business-related vehicle mileage, advertising, website fees, association dues, office supplies, and any other expenses necessary to run your business. If you work from home, you may be able to write-off part of your home expenses, as well.
I give a lot to charity. Will that impact me at tax time?
Giving to charity can help you at tax time. Did you know that donating money, household items, and appreciated stocks is all tax deductible? Consider putting several years’ worth of charitable gifts into a donor-advised fund (DAF) for a year, which allows you to earn an immediate deduction. Then, invest those funds for tax-free growth, using the DAF account to make future charitable donations.
I give money to my children and grandchildren. Are there tax implications for that?
It’s smart to have – and regularly review – an estate plan. Work with your financial advisor to determine the best way to structure these gifts to maximize the tax benefits, such as starting trusts for your beneficiaries, who may be in a lower tax bracket chapter.
Is it OK to think short-term, not long-term? Looking too far ahead makes me nervous.
Thinking long-term is a better move. Consider tax implications beyond just this year. While you might opt to max out your 401K to save on taxes now, that isn’t necessarily the right move, depending on your personal facts and circumstances. Since most people earn more money later in their careers and lives, it might make more sense to lower taxes now because you’ll likely be in a higher tax bracket in the future. In your early earning years, you might want to use after-tax money – like a Roth – and pay your taxes now so it grows tax- free, offering you valuable retirement benefits.
I don’t have a financial plan. Should I?
Yes – this may be the most important thing you can do to maximize your financial successes! Think about your short- and long-term financial goals and priorities. Then, create a strategic plan that outlines the steps you’ll take to achieve them. Work with a financial professional that can help you develop a personalized plan based on your personal circumstances and goals. Regularly review (and update) your plan to ensure that it still aligns with your goals – especially after a big life change, like the death of a spouse, divorce, job loss or change, etc.
Financial planning and developing tax strategies seems so overwhelming that I don’t even know where to start! Do you have advice on taking that first step?
We highly recommend consulting with a financial advisor who can help you develop personalized tax strategies that meet your needs – and your financial goals. A knowledgeable professional will help you take advantage of all the tax credits and deductions that you’re eligible for, evaluating your specific situation to maximize your savings. Financial advisors have the knowledge, experience, and objectivity to help you see the big picture and make decisions based on your current circumstances and future financial needs. No single approach is right for everyone, and a qualified professional can help develop a customized plan to help you achieve financial health and success.
At Guyton Forge, we work closely and collaboratively with our clients. As part of our services, we provide our clients with personalized tax services, helping them maximize their deductions and boost their bottom line. Our team excels at building successful, long-term relationships with our clients, providing wisdom and experience with a personalized touch.
Ready to talk about your taxes and create a solid financial plan?. The award-winning Guyton Forge team is here to help you achieve – and potentially exceed! – your financial goals. The Guyton Forge team has won numerous awards for their exemplary service and knowledge. Most recently, Joseph Guyton, Owner The Guyton Group, earned the prestigious designation of Five Star Wealth Manager* for the seventh time. To earn the Five Star Wealth Manager award, wealth managers must demonstrate that they provide the highest-quality services to their clients. Additionally, Joe and his son Andrew Guyton, Founder of Forge Financial, have each (repeatedly!) earned the prominent designation of President’s Council Qualifier, a Guardian award for financial professionals that provide exceptional customer service and nurture long-term client relationships.
Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 160 GOULD STREET, SUITE 310, NEEDHAM MA, 02494, 781-4494402. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Guyton-Forge is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch Group Insurance Agency, LLC, an affiliate of The Bulfinch Group, LLC. The Bulfinch Group, LLC is not licensed to sell insurance. CA Insurance License Number – 0A96200. Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 7383196.5 Exp 3/27
* This award is not issued or endorsed by Guardian or its subsidiaries. The annual Five Star Manager award is based on criteria developed and obtained by Five Star Professional. No compensation has been provided by the adviser in connection with obtaining or using the third-party award.
