Broker Check


Are You Giving Your Money Away?

| February 29, 2016
Tax Issues

Taxes!  Uncle Sam comes knocking every year. And for some of us, Uncle Sam will even come knocking on our grave. I have met people in my life that don’t mind Uncle Sam. They feel it is their American duty to pay their full share of taxes. I don’t disagree that it is my duty to pay my share of taxes as an American, but the tax code was written with much intricacy to promote education, domestic business, non-profit support and retirement funding. Believe it or not, Uncle Sam would rather you spend your dollars in one of these areas than pay him.

This means you have a choice. The key is to know your options, plan ahead, and take action.

So what are your options? This is probably the most complex part. It is virtually impossible for an accountant, CPA, tax attorney, or any other tax professional to know all of the options. An anonymous high-priced tax attorney once stated – and accurately – that: “The best and finest tax planning is done by people who have more money than they’ll ever spend or be able to give away. The worst tax planning is done by nice middle-class people who have middle-class virtues, those who have to work hard and save and sacrifice.1 Now why do you think that is? If you guessed that they have enough money to utilize the brainpower of more than one type of tax advisor, you guessed right. It would not be uncommon for someone like this to work with a family firm that has access to conferencing with an investment advisor, tax attorney, CPA, insurance agent and other sources. It would also not be uncommon for a nice middle class person to have access to these same professionals, but lack the know-how to bring them together and ask the right questions to encourage the best outcome for their personal tax situation.

The concept of the “life planning firm” was built upon many issues in the planning process just like this. The average middle-class millionaires we meet with have so many holes or overlap in their plans because they receive advice from each of these professionals individually and as circumstances dictated. This is not to say that any of these professionals are wrong or malicious in their practice - in fact, many have great ideas. They just have no clue what other advice this middle-class millionaire is adhering to. Also, the advice they receive is typically last-minute fixes. The most important thing you need to know about tax planning is to start now! Not just for 2016, but for 2017 and 2018 and your estate. Every tick of the clock throughout the year could cost you tremendously. My suggestion to you is get a comprehensive plan and don’t wait!

Once you know your options and have a plan, you have arrived at the easy part. Take action!

To fuel your fire, here are 5 things to begin talking with your life planner about:

  1. What will my tax liability be for each of the next 3 years? What will my estate tax liability be?
    (This conversation should not only be about your income, but possible changes in the tax code.)
  2. I would rather give money to my favorite non-profits than Uncle Sam. How can I do this?
    (This conversation needs to include your income taxes as well as your estate taxes.)
  3. Are there investments that could help lower my tax burden?
    (Again, government tries to stimulate domestic business, such as oil and gas production.)
  4. Is the retirement plan I have, and the contributions I am making, the best for my tax situation?
    (Did you know you have the potential to shelter up to $210,000 in a retirement plan for 2016?)
  5. What special tax rules and tax credits are available this year for me to take advantage of?
    (Many tax rules and credits change yearly that could align with your family’s goals.)


  1. Kiplinger, January 2015.