Tax Planning

As a former IRS economist, I help clients navigate complex tax strategies with fee-only, fiduciary guidance focused on minimizing liabilities and maximizing savings. I work with busy professionals and business owners in Maryland, DC, and beyond who want objective tax planning, without selling products or earning commissions.

Who Can Benefit

High-income earners

High-income earners face a different set of challenges: higher marginal tax rates, phase-outs of certain deductions, and the risk of triggering the 3.8% net investment income tax that can add thousands to your tax bill. For professionals and business owners in the DC area earning $200,000 or more, tax planning shifts from simple optimization to strategic necessity. Small decisions, like the timing of a bonus or poorly structured Roth conversions, can push you into higher brackets.

Backdoor Roth strategies become essential when your income exceeds direct Roth IRA contribution limits. This involves making a non-deductible contribution to a traditional IRA and immediately converting it to Roth, but it requires careful coordination to avoid pro-rata taxation if you have other IRA balances. Charitable giving also deserves strategic attention. Bunching donations into donor-advised funds or using Qualified Charitable Distributions (QCDs) from IRAs after age 70½ can maximize deductions and reduce adjusted gross income.

But the largest ongoing tax savings often come from strategic asset location: how you deploy different investments across your taxable, tax-deferred, and tax-free accounts. Asset location is straightforward in principle but powerful in practice: hold tax-inefficient investments in tax-advantaged accounts and tax-efficient investments in taxable accounts. Bonds and bond funds generate ordinary income taxed at your marginal rate, making them candidates for IRAs and 401(k)s. Stocks, especially those you buy and hold for the long term, generate capital gains taxed at preferential rates and belong in taxable accounts where you can harvest losses and control when gains are realized.

The math is significant. A portfolio with $500,000 in taxable assets and $500,000 in tax-deferred accounts can generate dramatically different after-tax returns depending on where each investment sits. Placing $200,000 in bonds in a taxable account instead of your IRA might cost you $2,000 to $3,000 annually in unnecessary taxes. Over 20 years, that's $40,000 to $60,000 lost to poor asset location alone. Combined with systematic tax-loss harvesting and coordinated rebalancing (decisions that account for tax consequences, not just target allocations), asset location becomes one of the most powerful levers in wealth building.

Asset location isn't a one-time decision. As your circumstances change, your strategy needs to evolve. Rebalancing across accounts requires thinking about tax consequences. A systematic approach means reviewing and adjusting throughout the year rather than making reactive changes in December.

For business owners, Solo 401(k)s offer flexibility in how you structure contributions between employee deferrals and employer contributions, which can help with cash flow planning. I also coordinate with your CPA on tax-efficient structures, such as S-corp elections, that might reduce your overall tax burden.

Retirees

Retirement introduces a new set of tax planning considerations, many of which require decisions that affect the rest of your financial life. The most visible is Required Minimum Distributions (RMDs), which force you to withdraw money from traditional retirement accounts. These withdrawals are taxed as ordinary income, and if not managed carefully, they can push you into higher brackets and trigger IRMAA surcharges on Medicare premiums.

The years between retirement and when RMDs start in your 70s often represent the best opportunity for Roth conversions. If you retire before claiming Social Security, your taxable income may drop significantly, creating space to convert traditional IRA dollars to Roth at lower rates. This reduces future RMDs and creates a pool of tax-free income you can draw from later without affecting Medicare premiums or Social Security taxation. Timing matters: converting too much in one year can backfire, but spreading conversions strategically over several years can save tens of thousands in lifetime taxes.

Social Security claiming decisions also intersect with tax planning. The order in which you withdraw from different account types (taxable, tax-deferred, Roth) can materially affect your tax bill through its impact on IRMAA surcharges and your overall bracket. This account sequencing (deciding year-to-year which account to draw from) is an ongoing management practice that continues throughout retirement. Drawing $30,000 from your taxable brokerage versus your traditional IRA in a given year can mean the difference of thousands in taxes when you factor in Medicare premiums and your overall bracket. This requires continuous, forward-looking analysis as your circumstances, market conditions, and tax law change. Coordinating these decisions with Medicare enrollment, charitable giving through QCDs, and estate planning creates a complex web that benefits from integrated, ongoing analysis rather than year-by-year reactivity.

How Tax Planning Integrates with Your Financial Plan

Tax planning doesn't exist in a vacuum. Every major financial decision you make has tax implications, and every tax strategy affects other parts of your financial plan. This is why I approach planning holistically rather than treating taxes, investments, and retirement as separate problems.

Retirement timing decisions require tax modeling. Should you retire at 62 or 65? When should you claim Social Security? How much should you convert to Roth before RMDs begin? These decisions interact in complex ways, and getting them right requires analyzing multiple scenarios across different time horizons. Drawing on my IRS background and experience as an economist, I model these tradeoffs so you can make informed decisions rather than guessing or relying on rules of thumb that may not apply to your situation.

You can learn more about related services through Financial Planning, Retirement Planning, and Investment Management.

Next steps

Tax planning works best as an ongoing partnership, not a one-time engagement. Schedule a free introductory call to discuss how proactive tax strategies can reduce your lifetime tax burden. You can also review fees and service options or visit the FAQ for answers to common questions about the planning process.