"Spring Cleaning" Tips for Tax-Efficiency

I’m seeing lots of seasonal posts lately, so I’m sharing my own style of “spring cleaning” ideas here today.?

Many of us entrust a CPA and a financial advisor to ensure our finances stay tidy, but that doesn’t mean we aren’t also responsible for checking in on things, too.

Here’s a brief to-do-list that will help you make sure you’re maximizing tax efficiency and keeping more money in your pocket:

Review Your Retirement Accounts

You should review your retirement savings accounts for the following things at least a few times a year:

• Is everything you’re depositing being invested??
• Are your investments well-balanced between taxed and untaxed assets?
• Are there any opportunities to invest in more tax-free (not tax-deferred) options?

Review Leverage and Interest Payments

As the interest rates fluctuate, it’s crucial that you:

• Assess current interest rates of all debts.
• Determine what responsible leverage makes sense (if any) for your retirement planning. Including a buffer asset that generates tax-free interest helps offset things like market fluctuations, lump payments (college funds, retirement distributions, etc).

Maximize Charitable Contributions?

Now is an ideal time to review your previous year’s taxes and how your charitable giving aided in your tax efficiency. Refer to your 2023 tax return to consider things like:

• What is your anticipated income for 2024 and does charitable giving help lower your tax bracket?
• If you own a company, should you utilize a donor advised fund for maximized tax efficiency?

Finally, reach out to your team of professionals. I love that saying, “the squeaky wheel gets the grease,” because it’s true in every aspect of life. Check-in with your team at least a few times a year. Your CPA is over the hump of the busy season and this is a great time to review everything and make sure you’re on track. Your financial advisors are always happy to meet with you and ensure nothing has fallen through the cracks.?

Did I miss any “spring cleaning” tips? I’m always looking for opportunities in tax efficiency, so please share your ideas, too. As always, reach out with questions at [email protected] or call 773-318-9608.