Straight To The Point:

Chris recently helped a couple alleviate their tax burden. Find out how, and make sure you don’t overpay in taxes.

The Real Deal:

Setting The Scene.

  • 2:36 – A recent couple, we’ll call them Harry and Sally, were frustrated with the federal income tax they’d have to pay. Both are retired and thought they were overpaying in taxes.

What Created Their Problem?

  • 3:05 – Harry and Sally’s tax return listed significant dividend income as well as capital gains. If you’re not familiar with the terminology, this just means they made a lot of taxable income on their investments. Their tax burden stemmed from the way they had structured their portfolio.

What Was Wrong With Their Portfolio?

  • 4:11  – While the couple only needed about $50,000 a year of income, they were paying taxes on more than $200,000. They weren’t withdrawing large sums from their account, but all of the activity within the account was resulting in large capital gains. This led them to overpay in taxes.
  • 4:41 – The couple relied on their advisor to manage their investments, but their advisor had been ignoring the tax ramifications of their investment strategy. We suggested they restructure their account to enable them to withdraw their small salary while deploying a buy and hold investment strategy. Less movement in their account led to a smaller tax burden. Remember, tax planning is different from tax filing, and you need to have a tax plan for your investments.

Work With A Fiduciary.

  • 9:57 – These clients needed an advisor who would keep their best interest in mind. We call this type of advisor a fiduciary. Not every advisor operates under this standard, and when you don’t work with a fiduciary, your investment strategies are more likely to be less beneficial to you. Our clients’ previous advisor had been working under a suitability standard. This meant that his strategies technically worked, but they weren’t the most helpful for our clients.

Beyond The Zone:

The host: Chris Patterson – EmailWebsite – Tax Free Retirement Toolkit – Call: 904-285-4489

The Toolkit:

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