Tax Planning

At Truly Aligned, we take a fresh and holistic approach to wealth management. While many wealth managers and advisors focus solely on investments, our wealth management services dive deep into every area of your financial life, especially taxes. Our mission is to develop comprehensive strategies that align your finances today and for years ahead, helping you minimize tax liabilities, enhance investment growth, and conserve your wealth. Through this alignment, we support your goals across a lifetime—and as you transfer wealth to future generations.

Understanding Federal Taxes

The U.S. federal income tax system is “progressive,” which means that as your income grows, it moves through a series of tax brackets with higher rates. This setup divides your income into portions, with each portion taxed at increasing rates. For example, the first portion of your income is taxed at the lowest rate, and as your income rises, the next portions fall into higher brackets with higher rates.

For non-qualified investments, long-term capital gains taxes apply to profits made from selling assets, such as stocks or bonds, that you’ve held for over a year.1 Long-term gains are generally taxed at lower rates—0%, 15%, or 20%—based on your total income. However, as your income grows, your tax rate on these gains can increase as well.

Today’s federal tax rates are relatively low compared to historical averages, but tax rates tend to rise when the government faces significant debt. With the federal government managing a substantial deficit, our tax strategies consider current tax rates and potential future increases, helping protect your wealth in any tax environment.

The Power of Diversifying Your Tax Exposure

Strategic tax planning involves more than just optimizing deductions; it also involves diversifying both your investments and how they’re taxed. Investment accounts in the U.S. generally fall under three main tax treatments:

• Pre-Tax Accounts (Traditional Accounts: IRA, 401(k), 403(b), 457, Profit-Sharing Plans, etc.): Contributions to these accounts are made with pre-tax dollars, meaning you defer taxes now but will owe income taxes on withdrawals in retirement.
• Post-Tax Accounts (Roth Accounts: Roth IRA, Roth 401(k), Roth 403(b)): Contributions are made with after-tax dollars, allowing your money to grow tax-free, with both contributions and gains withdrawn tax-free in retirement.
• 1099 Income from Bonds and Stocks: Income from dividends and interest is generally taxed in the year it’s received.2 Depending on the holding period, this income may be taxed at either regular income tax rates or lower capital gains rates.

We work closely with you to determine how much income you’ll need each year in retirement, then develop withdrawal strategies that may incorporate Pre-Tax, Post-Tax, real estate, pensions, and Social Security. This approach allows us to identify which accounts—traditional, Roth, or taxable—are best suited to support your unique financial situation.

At Truly Aligned, we often find that people contribute to traditional 401(k)s or similar accounts without considering the long-term tax implications. By taking a more personalized approach, we help ensure your retirement income is tax-efficient, diversified, and resilient, even if future tax rates rise.

Specialized Tax Analysis and Holistic Planning

If you have stock options from an employer, questions about when to collect Social Security, or concerns about the tax impact of increasing business income, our team can help. Using advanced tools like Holistiplan software, we begin with a detailed tax analysis of the past two years of tax returns, allowing us to review past taxes for missed opportunities and forecast future income. This analysis helps us recommend the most tax-efficient time to sell stock options without pushing you into higher tax brackets and determines the best time to collect Social Security based on your financial and health situation.

Through this planning, we help you stay informed and prepared, knowing your finances are structured to withstand future tax changes and economic fluctuations.

Our Dedicated Tax Team

Our in-house team of tax professionals manages all tax planning and reporting to ensure your financial values and goals remain aligned. We handle document submissions, collaborate with your accountant, review tax returns, and can even attend meetings with your accountant when needed. This attention to detail builds confidence for our clients, knowing they’re prepared for potential tax changes, political shifts, or economic events. Our proactive team saves you time and hassle during tax season, handling each detail so you can focus on your goals and priorities.

Let’s Build Your Tax Strategy

Are you ready to understand your overall tax picture and develop a plan that strengthens your financial future? Schedule a call with us today and let us help you create a tax strategy that supports your goals and provides lasting confidence. At Truly Aligned, we’re here to make sure your wealth is managed in alignment with what matters most to you.

1 Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk.

2 Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.