Tax Strategies

Tax Management

At the core of any portfolio or investment plan that we design we can mitigate the effects of taxes that can occur when portfolios are not effectively being tax managed year-round.

Here’s an example.
A hypothetical $100,000 portfolio invested in 60% stocks and 40% bonds in 1979 would have grown to $3.17 million before taxes by 2011. With no efforts to mitigate the tax effect, the government would have taken almost 49 percent of the gain, lowering the investor’s wealth to just over $1.6 million.













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​Tax management strategies in these portfolios can include:

-Tax-exempt investments
-Tax lot accounting
-Loss harvesting
-Wider rebalancing ranges
-Tax-aware trading
-Gain/loss offset
-Transition of low-cost-basis stocks

Business owners

If you are self-employed, have a closely-held business, or a partnership, there are strategies that you can implement to reduce your tax liability. We will analyze your current situation to determine which strategies efficiently maximize your tax and retirement implications.

For example, depending upon your age and other factors of your business, we can implement a hybrid defined benefit plan that may reduce your tax liability and accelerate your retirement savings. Traditional defined benefit plans can allow contributions up to $210,000. Hybrid plans are available, and depending upon certain factors, they may actually allow much more. Why is this important? The easy answer is: The more you can contribute to a tax deferred plan, the more you can deduct from your income. These plans may be added to your current retirement plans or combined with other defined contribution plans such as a 401(k); we will do this analysis for you.

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Due to complexities and recent changes in tax legislation such as the Pension Protection Act of 2006, your advisor may not even be aware of or versed in these strategies.



These plans are federally regulated and compliant under IRS and the Employee Retirement Income Security Act laws, which is why they should be designed and managed by qualified investment advisors and plan administrators. For business owners, this is not as difficult as it sounds. We can make this process simple by providing a preliminary review of what types of plans make the most sense for your business.

** Source: Parametric Portfolio Associates: 60% Russell 3000; 40% Barclays Capital Agreement; No liquidation. Interest income and dividends are taxed annually at historical top marginal tax rate; capital gains are realized at 50% per year and are taxed at the historical long-term gains tax rate at the time. Past performance is no guarantee of future results.

A hypothetical $100,000 portfolio before taxes (invested 60% in stocks and 40% in bonds) held for 33 years would have grown to about $3.2 million. If the portfolio was taxed like an average mutual fund, it would have lost 49% of its value, due to taxes paid and earnings lost on that money. Tax-managed investment strategies are designed to minimize capital gains distributions and enhance after-tax returns. As of 12/31/11. Since inception 12/2002. There is no guarantee that distributions will not be made in the future.