Spring Tax Planning & Investment Review

Spring Tax Planning & Investment Review

Tax season is over, and Spring is here; it’s time to strategize. Proactive planning is vital to staying ahead of the curve and avoiding unpleasant surprises. The tax code was re-vamped in 2018 and many taxpayers were caught off guard. While taxes were generally cut for most individuals, so was withholding. Some taxpayers received a smaller refund than expected, and some taxpayers expecting a refund found themselves with a tax bill. So, now that your tax return is complete and 2018 is fresh in your mind, take some time to plan for 2019. While you’re at it, give your investments some attention. Then, enjoy the summer!


Proactive planning means you are meeting with your tax professional more frequently than just during tax season. January through April are extremely busy months for tax preparers, so there isn’t much time to dedicate to planning (other than the most basic tactics like funding an IRA or HSA). Once the busy season winds down, tax professionals can focus more on identifying opportunities to help you achieve your goals. Both tax and broader financial planning happens year-round. Here are some of the things you should be looking at right now:

Review your 2018 return: Where is your income coming from? Is it wages, business income, or both? How much investment income is showing up on the return? Do you have a lot interest income, or none at all? These questions can give you a good start before digging deeper. For instance, if you’re in a high marginal tax bracket, you might look for ways to defer income, such as funding a retirement account with pre-tax dollars.

Review your pay-stub: You can use a recent pay-stub to get an idea of what your 2019 taxable wages and withholding will be. Should your withholding be adjusted? Are you contributing to a retirement plan? Are there any other employer benefits you could be taking advantage of, like an HSA or dependent care benefits?

Meet with your tax professional: Ask questions and be open to options. Your tax professional can identify ways to streamline your finances and reduce your taxes while helping you implement the strategies you decide. A trusted advisor can offer a different perspective and cut through your own biases with objective advice.


While reviewing your taxes and planning for 2019, you should take note of how your investments are being taxed and any opportunities for more tax-efficient investing. The location (ie, in taxable accounts or tax qualified accounts) of your investments can impact your current taxes and your overall long-term wealth. Generally, it makes sense for investments producing ordinary income regularly to be in tax qualified accounts, and investments producing qualified income irregularly to be in taxable accounts, but that may be too simplistic for many investors, as your whole financial circumstance should be considered. Other ideas you should be looking for are as follows:

Streamline your retirement accounts: If you have multiple retirement accounts carried over from previous jobs, it may make sense to consolidate those plans into one IRA or, if your current plan allows it, rollover those old accounts into your current 401(k) plan—especially if you really like your current plan. Just a simple declutter can make your financial affairs easier to manage and understand.

Review your portfolio: Has your risk tolerance changed? Has your portfolio’s risk profile drifted? Maybe it’s time to rebalance. Are the fees still reasonable? Are there ways to simplify your portfolio?  Asking these questions and get you thinking on how your investments are and/or should be aligned.


Periodically review your taxes, investments, and your overall financial condition to stay ahead of the game. You’ll sleep easier and encounter fewer unexpected surprises. Even small tweaks can make a huge difference. If you would like help analyzing your tax situation and planning to maximize your after-tax wealth, contact a CPA financial planner.


Originally posted May 3, 2019

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