Insights from Debra Taylor, Managing Partner and Chief Tax Strategist

Once your tax return is complete, there are numerous items we want to review in detail to support our tax planning efforts for the rest of the year. This is an important touchpoint, as it gives us a clear snapshot of what happened last year and a roadmap of areas we can target to find additional potential for tax savings.

What are we looking for during this review? That will vary depending on your specific circumstances, but there is a list of factors we commonly explore. Here are just a handful of them:

• Average Tax Rate – Your average tax rate is calculated by dividing the total tax paid by total income. This rate can give us a better understanding of your overall tax picture.
• Carry Forward Losses – Capital loss carryforwards can help you use investment losses from previous years to potentially offset future gains, creating valuable tax planning opportunities.
• IRMAA Surcharges – Medicare Income-Related Monthly Adjustment Amount (IRMAA) is the extra surcharge that could be added to your Medicare premiums, depending on your income. This can be an unexpected expense, and we want to look for ways to decrease income (where possible) and otherwise plan around the surcharges.
• Itemized vs. Standard Deduction – Did you take the standard deduction when itemizing deductions could have been more beneficial for you? We consider planning strategies (such as “bunching”) and help you make sure you use the deduction strategy that’s best for your situation.
• Phaseouts – There are numerous tax credits available, but they are subject to a variety of income phaseouts. To help you take advantage of all available tax credits, we explore whether you are in a phaseout range so we can plan accordingly.

Debra Taylor is not registered with Cetera Wealth Services LLC. Any information provided by this individual is provided entirely on behalf of CWM, LLC and is in no way related to Cetera Wealth Services LLC or its registered representatives.