Tax Planning for Financial Advisors:

Establish a cash balance pension plan to allow higher contribution limits than traditional 401(k)s, ideal for high-income earners.

Offset capital gains by selling investments at a loss to reduce overall taxable income.

Implement an accountable plan for business expenses, allowing employers to reimburse employees for business expenses without counting them as taxable income.

Utilize charitable donations to reduce taxable income, especially through donor-advised funds or qualified charitable distributions from IRAs.

Take advantage of the Augusta Rule, which allows homeowners to rent out their homes for up to 14 days per year tax-free.

Maximize contributions to retirement plans like 401(k)s, IRAs, and SEP IRAs to defer income taxes.

Choose the appropriate entity structure (S-Corp, LLC, C-Corp) to optimize tax treatment based on the business’s income and goals.

Use non-qualified deferred compensation plans to delay income and the corresponding taxes to a future period when the tax rate might be lower.

Convert traditional IRAs to Roth IRAs in years of lower income to reduce future tax liabilities.

Leverage bonus depreciation to accelerate the deduction of the cost of qualifying property in the year it’s placed in service.

Elect to expense certain property costs under Section 179 instead of depreciating them over time.

Contribute to an HSA, which offers triple tax benefits—contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses.

Defer capital gains taxes on real estate by reinvesting the proceeds from a sale into a similar property under Section 1031.

Transfer appreciating assets to heirs now to lock in their current value for estate tax purposes, often using techniques like grantor retained annuity trusts (GRATs).

Maximize the 20% QBI deduction for pass-through entities by optimizing income levels and entity structure.

Utilize the annual gift tax exclusion to transfer wealth tax-free, currently $18,000 per person in 2024.

Accelerate depreciation deductions on real estate by separating personal property components from the building structure.

Spread the recognition of gains over several years by structuring the sale of assets as an installment sale.

Use CRTs to reduce taxes on appreciated assets while providing an income stream to beneficiaries.

Take advantage of energy-efficient home or business improvements, which may qualify for tax credits.