Tax Planning Strategies

Ty Bongiovanni, Wealth Advisor

Your tax plan can determine the success of your financial life. An efficient strategy can help you save money on your taxes while maximizing your wealth generation. Planning can be challenging to do alone, which is why experienced financial advisors can guide you to create a plan that best suits your financial goals.

Tax planning encompasses how you spend and save money as an investor or business owner. There are many factors to consider when restructuring how you handle your assets. To manage your wealth effectively, you need to have a system that incorporates a variety of strategies coherently and efficiently.

What Is Tax Planning?

Tax planning should always be part of your financial planning. However, tax planning focuses on protecting your wealth from excessive taxation. The goal is to make all your financial strategies work together in the most efficient way possible so that you pay the least amount in taxes every year.

Adopting a plan that minimizes your tax payment is efficient. Reducing tax liability while maximizing your investment opportunities is a powerful path to financial success and effective wealth management.

Beyond Tax Management

Tax planning goes beyond managing your taxes and helps you determine how to manage your financial assets with tax considerations in mind. These strategies inform the decisions you make for your wealth management throughout the year, rather than just before filing deadlines.

A professional can help oversee your finances in case you miss any opportunities to save. They can also help you when it’s time to file, ensuring that everything is in order and that you receive all the deductions and credits to which you are entitled.

Understanding Tax Planning

Tax planning requires understanding how your various financial factors interact with one another. These factors include:

  • Income timing
  • The size of income
  • Timing of purchases
  • Expenditure planning
  • Investment types
  • Retirement plans

These financial factors work together to dictate your tax filing status and deductions to help receive the best return possible. The biggest goal for tax planning is to make running your finances more efficient.

Creating a unique plan that suits your needs is essential to successful tax planning.

  • Investments can do a lot for your finances, but you need to know how they affect your planning. We can help you find opportunities to invest with your tax liability in mind.
  • Everyone needs a retirement plan, but some are better than others for keeping your assets safe from significant taxation.
  • Business Operations. Tax planning doesn’t stop with your personal finances. We can show you how to use wealth management strategies to help improve how your business functions.
  • Grow Your Business. A plan can not only help your current business interests, but can also give you the savings you need to expand within your industry effectively.

Tax Strategies

There are a variety of tax planning strategies that can help you become a more efficient saver. Some of the most common techniques include:

  • Income splitting, including family trust or spousal loan
  • Tax-efficient investment vehicles
  • Investing in registered accounts, including a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Accounts (TFSAs) and Registered Education Savings Plans (RESPs)
  • Charitable donations
  • Distributing assets between accounts
  • How you transfer wealth to beneficiaries
  • Holding companies and insurance

More strategies that could help you with your wealth management tax plan include, but are not limited to:

Saving for Retirement

One of the most basic tax planning strategies is saving for retirement. But basic doesn’t mean simple. It’s an easier way of managing your money than investing in different types of funds and seeing how they perform. Setting up a retirement fund is a simple way to put aside some of your money and be rewarded in your tax return.

Incorporating retirement savings into your tax strategy can help you qualify for several tax breaks and reduce your tax bill by using retirement accounts allowing you to defer paying income tax on your savings. Others allow you to avoid paying taxes on investment gains you accrue.

Tax Deductible Expenditures 

You may be missing out on tax deductions for some of your expenses. Depending on your tax code, some of your costs may meet the requirements to be tax-deductible.

Tax Gain Loss Harvesting

This is one form of tax management that relates to investments. This strategy can use a portfolio’s losses to offset overall capital gains. Long-term losses offset long-term gains before they offset short-term gains. This leaves short-term gains, or your earnings from assets you have owned under a year, to be taxed at regular rates.

Wealth Management 

Wealth management is intended to help you find the right financial products and strategies to help you save on taxes and meet your financial goals. Whether you’re saving for early retirement or have recently invested in a property, you should make choices that align with your plans and goals.

Strategies for Wealth Management 

Wealth management solutions are typically sought out by high net worth individuals interested in one service to handle all of their financial needs.

Investment Options 

How you set up your assets and report them on your taxes affects your investments’ success. Your investments increase your wealth, but how you handle them can give you more significant tax breaks.

ESG Integration

ESG integration is part of smart investing. Here, investors use their money in ways that align with their core beliefs. This isn’t a new concept, but applying environmental, social and governance to investment opportunities has been rising as many people adopt a green lifestyle.

This is broken down into three categories that affect the way you spend and save:

  • Environmental concerns. This includes issues of climate change, natural resources, conservation, pollution and waste management, and water scarcity worldwide.
  • Social Issues. Corporate philanthropy, community and government relations, workplace health and safety, human rights and diversity in intersectional areas of your life.
  • Governance issues. Accounting practices, accountability and structure, disclosure agreements, executive compensation, corporate ethics and regulatory compliance and transparency for government and corporate agencies.

Community involvement, diversity and inclusion and environmental responsibility are driving forces between these investment options. They’re beneficial not only to you, but to others and the future generation. Some categories within this option are socially responsible investing (SRI) and impact investing.

How you feel about these issues can determine how and where you invest your money while also benefiting your tax savings.

Portfolio Management Service

PMS is an investment option where your wealth manager keeps track of all your investments in equity, commodities, cash, and bonds. The service does all the research for you, then invests funds in assets that will help provide you with the best tax savings.

Alternate Management Funds

An AIF is another investment option where funds from high net worth individuals and ultra high net worth individuals are pooled in private investments, including hedge funds, real estate funds and private equity. Tax rules can be tricky, so you might make some errors if you keep track of these funds yourself.

There are different categories of funds, which makes using a professional wealth management service more reliable. These categories include angel funds, private equity funds and hedge funds.

Equity-Linked Schemes 

Equity-linked schemes, or tax-saving mutual funds, can be used for tax savings, but they have the most significant impact on wealth generation because they are exposed to equity. These are primarily invested in the stock market or equity. They come with a lock-in period of three years, so they have better liquidity than similar options.

How Nesso Wealth Services Can Help

Planning and management help you minimize your spending while maximizing profits. However, if you’re doing it on your own and you’re not familiar with how to best navigate the strategies involved in tax planning, you might end up with more problems than you started with.

Nesso Wealth Services in Connecticut use a proactive approach to tax planning. Our team helps all clients create a customized plan for their financial goals. If you’re looking for a change in how you handle your finances, Nesso can put you in a position to help achieve your financial goals.

Use Tax Planning When Managing Your Wealth

When it comes to tax planning, there are many elements to consider. From your income, assets, investments and how your tax return looks every year, make sure you have a team like Nesso that you can trust with your tax planning while managing your wealth effectively.

All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful.

If you’re interested in learning more about how planning for your taxes can improve your wealth management, contact us today.


Some alternative investments involve a high degree of risk, and returns can be volatile. Investing in an alternative investment may only be suitable for persons who are able to assume the risk of losing a portion or all of their entire investment. 

This piece is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

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