The financial decisions that you make can affect your tax bills for years to come. Having a solid team of professional advisors can make a huge difference, and so can having a team of advisors know each other and work well together.
Assuming that your team includes financial, tax, and legal advice, here are three areas where all those advisors overlap and where they should be working together to help you plan out the future.
Investing: Your financial planner is going to take the lead here, but the effect of financial planning can have many unintended effects on your taxes. It’s not just capital gains and losses, the kind of investments that you make can have special rules that will affect you. One example is municipal bonds, which you might have to generate tax-free interest, which may have to be counted as income subject to the alternative minimum tax.
Insurance: The various kinds of health insurance plans you can choose from have tax implications, especially since the passage of the Affordable Care Act. You should talk with your advisors about which kind of plan will work best for you, your business, and your employees.
Estate Planning: Estate Planning is usually a lot more complicated than most people assume. You should have your wills, trusts, and beneficiary designations updated and accurate, but smart estate planning can involve much more than just setting out the required paperwork. For example, you might want to start divesting assets now to lessen the effect of estate taxes (or just check to see if estate taxes will affect you at all). If you maintain residences in two states you should check the tax implications of which is listed as your primary residence.
If you’re already a client of ours, we’ve probably hounded you about who else is on your team, but if you’ve changed recently, have questions about this, or if you just need reassurance that we get along with those dastardly lawyers, contact us.