Most people don’t have a tax problem. They have a strategy problem. That’s the case Matt Sivertsen, CFP®, CeFT® and Caleb Arringdale, EA make in this webinar, and it reframes how a lot of households think about Tax Day.
Tax preparation is mandatory. Tax planning is optional. Skip the second one, and you spend every spring reacting to a return you can no longer change. Build it into the year, and the return becomes the last step in a process you’ve already optimized.
Preparation Looks Backward. Planning Shapes the Outcome.
Preparation is what happens when you hand a year’s worth of documents to your accountant in March. By then, the year is closed. Credits missed are missed. Deductions you could have taken are gone. Roth conversion windows have shut.
Planning happens inside the calendar year, when there’s still time to do something about it. Matt and Caleb walk through how proactive planning lets a household ask a different set of questions: not “what do I owe,” but “what’s the lowest lifetime tax bill we can produce, for us and for our heirs.” Sometimes the answer is to pay more this year. Sometimes it’s to pay less. The point is having the option.
Six Strategies Worth Knowing
Matt and Caleb worked through the tools they use most often with clients. Each one is powerful in the right situation, and each one requires the calendar year to execute.
Roth conversions move money from a pre-tax account into a Roth. Pay the tax today using outside dollars, let the rest grow tax-free for decades. Whether it’s the right call depends on current vs. future tax brackets, available cash to pay the bill, and what the household is trying to do for the next generation.
Tax loss harvesting turns a temporary market dip into a realized loss that offsets other capital gains, with any leftover carrying forward indefinitely. Opportunities are unpredictable and have to be acted on inside the calendar year.
Maximizing tax-advantaged accounts like 401(k)s, IRAs, and HSAs sounds obvious, but missing the limit by $5,000 to $10,000 because no one was tracking is a common and avoidable mistake.
Charitable giving offers three vehicles worth knowing. Qualified charitable distributions from an IRA at age 70½ route money to charity without it counting as taxable income. Donor advised funds let households clump several years of giving into a single high-income year. And starting in 2026, a $1,000 per person above-the-line deduction is available for cash contributions. The donor advised fund gets even more powerful when funded with appreciated stock: donate a position bought at $10 that’s now worth $100, and the household captures the full $100 deduction while avoiding the capital gain on the $90 of appreciation.
Income timing matters because many tax benefits don’t phase out smoothly. They drop off a cliff. One dollar over the threshold and the credit, the lower Medicare premium tier, or the senior property tax freeze disappears.
Safe harbor estimated payments prevent underpayment penalties. A preparer working only with last year’s return often defaults to a generic calculation. A planner who knows what’s happening in the current year can dial that up or down so the household isn’t penalized and isn’t sitting on a giant refund either.
Why the Three Buckets Matter
The account a dollar lives in matters as much as the dollar itself. Pre-tax accounts defer tax until withdrawal. Roth accounts grow and distribute tax-free. After-tax brokerage accounts produce dividends, interest, and capital gains every year along the way.
Households with all three buckets have flexibility. They can stay below an income cliff by pulling from Roth or after-tax instead of an IRA. They can route an IRA distribution as a charitable QCD. They can harvest losses when markets dip. The strategies stack in ways a single bucket can’t replicate.
Estate and Gifting
For families thinking about the next generation, several tools came up: annual gifting of cash or stock at up to $19,000 per person per recipient, 529 superfunding to front-load a grandchild’s education account, family limited partnerships and LLCs for households holding farmland or closely held businesses, and Roth conversions structured to leave the next generation a tax-free account.
Four Real-World Examples
- The gap year. A pre-retiree in their early 60s, no longer drawing wages, not yet on Social Security. Often the right window for a Roth conversion.
- The high-income year. A business sale, equity compensation event, inheritance, or windfall bonus. Donor advised funds and deferred income strategies can blunt the impact.
- The overlooked harvest. A sudden market drop in a position the household holds. Acting inside the calendar year captures a loss with real tax value.
- Bonuses and equity compensation. Standard 22% federal withholding routinely under-withholds for high earners. A $50,000 bonus can leave thousands owed at filing time.
The closing theme: small intentional decisions made consistently throughout the year compound over time. None of these strategies is dramatic in isolation. Together, and applied year over year, they reshape what a household keeps.
Talk With a Planner Who Works With a Tax Team
If your tax return surprises you most years, or if you’ve never had a conversation with your advisor that touched on charitable giving, Roth conversions, or withholding strategy, there may be opportunities you’re not seeing. The Planning Center offers a free 15-minute conversation. If we’re a fit, we’ll tell you how we can help. If we’re not, we’ll point you toward someone who is.
