Tax Tip from the week of June 9, 2008
Make the most of your professional advisors
Who's on your team? No, not your sports or reality-show dancing team, your
business team, that group of professional advisors who are ready and willing
to help you tackle tough financial decisions.
Those decisions can have an effect on your taxes this year as well as in the
future, so you want to be sure your advisors know each other – and are
working together for your benefit.
As you begin your midyear planning review, here are three areas where coordinating
the advice you receive can pay off.
- Investments. Capital gains and losses from
sales of your securities affect your taxes, of course, but the kind of investments
you make can also have an impact. For instance, buying municipal bonds to
generate tax-free interest may result in the unintended outcome of creating
income subject to the alternative minimum tax.
- Insurance. The type of health insurance
plan you select can have tax implications. An example: A Health Savings Account
(HSA), used in conjunction with a high-deductible health plan, can save premium
and tax dollars. You fund an HSA with pre-tax cash and take tax-free withdrawals
to pay medical expenses.
- Estate planning. Wills, trusts, and beneficiary
designations provide the framework for carrying out your wishes after your
death. Communication between your tax and legal advisors helps ensure that
these documents offer the greatest protection for your heirs while minimizing
estate tax consequences.
Please call us to schedule a comprehensive review of your goals. We're delighted
to be part of your professional team.