Taxes are a fact of life. Efficiently managing your assets and planning for taxes can be a complex part of wealth management and a critical component to retaining your assets.

At FCS Private Wealth Management, our financial advisors serve high-net-worth individuals and families from Palm Beach Florida all the way to Napa Valley, California through our Kansas City based asset management company. 

Our team has decades of experience in wealth management and all the aspects that come with it. We pride ourselves in striving to make sure our clients can relax and enjoy the benefits of their wealth. Every client has unique circumstances, goals, and desires so we specialized in providing customized wealth management plans formulated to your individual needs.

The importance of tax-efficient investing

The goal of tax-efficient investing is minimizing the amount of tax you owe on your annual investment income. There are two basic tenants for achieving this:

1. Make tax-efficient investments in your taxable accounts.
2. Make investments that aren’t tax efficient in tax-exempt or tax-deferred accounts.

Tax-efficient investing can be a key component of retaining your assets and protecting your return on those assets. Tax planning is especially important for those living in a higher tax bracket. 

Working with a CERTIFIED FINANCIAL PLANNER™ practitioner can help you make strategic investments while remaining tax efficient. At FCS, we specialize in helping simplify tax-efficient strategies for high-net-worth individuals and families.

When you are not properly accounting for tax liabilities, you can end up losing more of your ROI than you need to. Not only could you lose the money you pay as taxes, but you could also lose the growth that money could have generated if it had stayed invested.

Your after-tax returns are more important than your pre-tax returns. After all, your after-tax dollars are the ones available to you to spend or reinvest. We believe striving to minimize taxes is a core principle of wise investing.

Why you need a CPA

A Certified Public Accountant (CPA) is an important part of your wealth management team. At FCS, we work with CPA professionals to provide our clients with a well-rounded financial team. Tax planning for ultra-high-net-worth individuals can be an extremely complex process, so having a professional is recommended.

One of the biggest challenges with tax planning is staying up-to-date with all the legislative changes. Your CPA can stay abreast of the changes (at both the federal and state levels) and help you plan accordingly. Having CPA certification requires them to constantly stay up to date in an increasingly intricate tax environment.

This is because a CPA is more than just an accountant—they are licensed and knowledgeable about tax law. They can prepare your tax documents, file your returns, and provide advice on reducing your tax liability. 

The anatomy of tax-efficient investing

Some people make the mistake of thinking that taxes are something you only need to think about come Tax Day. In reality, tax planning is a year-round process. 

At FCS, we always consider tax strategies when constructing your investment portfolio. Making sure that your assets are allocated into the most tax-efficient account type is an important foundation. 

More than that, we never implement your investment plan without consulting with your CPA. Some of our wealth management recommendations can introduce new taxable situations, or the type of holdings we’re recommending can impact your taxable income. Our experienced financial advisors work to make sure that our recommendations serve you most efficiently.

And of course, as your life changes, or as the tax law inevitably changes, we also make sure to rebalance your portfolio to help maintain optimal asset allocation.

Important aspects of tax planning

There are multiple aspects of your financial life that affect your tax planning strategies. Some of these change from year to year, or just with major life events, so it’s important to keep them in mind as part of the tax planning process.

Income

The first thing that we always look at when starting the tax planning process is a client’s income level. Changes in income, or the desire to maintain a certain income level, are the foundation for your wealth management.

Regulations and legislation

Keeping up with changes made to tax legislation can be difficult as the government passes through different administrations. That’s one of the key benefits of having a CPA on your financial team. It’s part of their job to understand and implement necessary changes to protect your assets and follow the law.

FCS collaborates with these professionals who stay up-to-date on regulation changes to provide our clients with the best possible recommendations year to year.

Family changes

Getting married and having children can affect your tax planning. These life events can change the way you need to file your taxes, whether you’re filing jointly or as head of household. 

Planning for your family’s future also factors into your overall tax planning. You want to make sure that any financial gifts you’re giving or inheritance trusts you plan to set up are accounted for in your long-term financial goals.

Further, if you’re planning to help your children or grandchildren go to college or buy a home, there are tax-aware ways to support these endeavors.  

Estate planning

When you’re planning for retirement, you’ll need to factor in how taxes will affect your investments in the long term. Some retirement income accounts will still be taxable once you are drawing on those investments.

With tax-efficient investing, you can save more for retirement and keep more of what you saved. Further, if you’re planning on leaving an inheritance or making a charitable contribution as part of your legacy, those things need to be considered as well.

Charitable contributions and gifts

Whether you’re looking to support your favorite charitable organization or invest in a loved one’s future, tax-smart techniques can help your giving go further. Charitable contributions are also (usually) tax-deductible. Setting up a donor-advised fund can help you reduce your tax burden after a sudden windfall, too. 

New opportunities in the market

Depending on your financial goals, new opportunities can arise in the market that may affect your gains and losses. Paying attention to changes in the market is a key component of portfolio construction and rebalancing, which can affect your tax planning.

How FCS supports your tax-efficient investing in Kansas City

Portfolio management

FCS Private Wealth Management has decades of experience using the most sophisticated wealth management strategies. Our team customizes your portfolio and investment plan to your specific needs over time.

After working in some of the most challenging markets in history, our advisors strive to create an investment plan that can weather any storm. We meet with you to review your portfolio and investment plan to help make sure things are running as they should. 

Education

A financial advisor will provide guidance and education on the best investment strategies to help you retain your assets and avoid unnecessary taxes. Our advisors can provide insight into the investment options available to you. 

Professional partners

We partner with your CPA and tax preparer to help ensure your wealth management plan is optimized for tax efficiency. The last thing that any of us want to see is our clients dealing with a tax liability that they could have avoided. It’s important to check with your tax professional to help ensure our financial management recommendations are sound. 

Tax-efficient investing starts with the right wealth management team

FCS Private Wealth Management is built on the pillars of trust, competence, and discretion. These three aspects extend to every service we provide for our clients. Wealth, without the time to enjoy it, is pointless. 

We provide our clients with personalized service that allows them the freedom to enjoy their hard-earned wealth. We partner with CPA professionals to provide guidance to our clients on tax-efficient investing in Kansas City. Whether you’re in Nashville, TN, or Scottsdale, AZ, our team can provide you with the wealth management strategies that work for you.

If you’re ready to experience worry-free wealth management, give us a call. We’d love to chat about how we can serve you.

Wells Fargo Advisors Financial Network is not a legal or tax advisor.  Any discussion of taxes represents general information and is not intended to be, nor should it be construed to be, legal or tax advice.  Tax laws or regulations are subject to change at any time and can have a substantial impact on an actual client situation.

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