Tax planning considers the tax implications of individual, investment, or business decisions, usually with the goal of minimizing tax liability. While decisions are rarely made solely on their tax impact, you should have a working knowledge of the income or estate tax issues and costs involved.

A major goal of tax planning is minimizing federal income tax liability. This can be achieved by:

• Reducing taxable income through income deferral or shifting
• Deduction planning
• Investment tax planning
• Year-end planning strategies

Investment tax planning involves evaluating how to best position assets in order to minimize the amount of taxes you have to pay on an ongoing basis. This requires year-round planning, and it begins with an in-depth understanding of the tax implications of various investments and investment strategies, including: 

• Tax-exempt investments
• Gains and losses
• Qualified dividends
• Tax-deferred investing
• Passive income and losses
• Mutual fund taxation

If you give away wealth, during life or at death, you may incur federal taxes—and possibly additional state taxes. These taxes include gift, estate, income, and inheritance taxes. You can help protect the assets you transfer from excessive depletion by understanding these taxes and the various strategies you can use to minimize them.

Nan P. Bailey • 1875 Palmer Avenue • Larchmont, NY 10538 • 914-834-9105