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4 Simple Steps to Lower Your Taxes

Tax planning allows you to take advantage of opportunities throughout the year that
could save you money now, next tax season, and in retirement. Tax preparation is histori-
cal by nature, preparers look at your past year and determine whether you will get money
back, owe the government, or hopefully break even. New “simplified” tax rules don’t dis-
count the importance of tax planning, if anything they create new
opportunities. Here are some tips on how you can save money now and later:

WITHHOLD THE CORRECT AMOUNT FROM YOUR PAYCHECK
Getting a big return during tax season can be fun, but what it really means is that you gave the government
an interest-free loan. I understand some people use this as a forced savings account, but the actual interest
you can earn in a savings account on that extra income is more than you will get from the government (and
in this interest rate market that is saying something).
PUTTING MONEY AWAY IN A QUALIFIED RETIREMENT PLAN
This has two benefits; first, it improves your chances of being able to retire comfortably, and second, what-
ever you put into a qualified retirement plan reduces your tax liability. You can contribute up to $18,500 per
year into a qualified employer plan and an additional $6,000 if you are over age 50!1
BRACKET BUMPING
Knowing where you fall within your tax bracket is critical and presents a plethora of tax planning solutions
that can potentially save you money come next tax season or allow you to convert fully taxable investments
into tax-free or tax-advantaged investments. If we expect taxes to be higher in your retirement and can con-
vert taxable assets to tax-free assets at a lower rate today, why wouldn’t you?
CONTROL INVESTMENT INCOME
Make sure your financial advisor and tax planner are on the same page when it comes to tax planning. Divi-
dends and capital gains that you are not actually pocketing can cost you money in taxes at the end of the
year. Tax-loss harvesting and asset location can help solve this problem, but it takes a coordinated effort.
Do you think taxes will go up or down in the next 20 years? What about 50? I can tell you as of right now they
will go up in 102 This presents you with a unique opportunity to potentially decrease your tax burden next
year and beyond.
For additional information on tax planning
and the options available to you, contact
Brandon Williams at (803) 649-6645.

Brandon is an Investment Advisor Representative
(IAR) with Prosperity Capital Advisors,
a Registered Investment Firm.

I
The Smith Group www.tsgwealth.com

Financial Planning and Investment Advisory services are offered
through C2P Capital Advisory Groups LLC D/B/A Prosperity Capital
Advisors (PCA) an SEC registered investment adviser with its principal
place of business in the State of Ohio. Brandon Williams is registered
as an Investment Advisor Representative of PCA in the state of South
Carolina. For more information regarding PCA, please visit www.
adviserinfo.sec.gov. PCA does not provide tax or legal advice

1. https://www.irs.gov/newsroom/irs-announces-2018-pension-plan-limitations-401k-contribution-limit-increases-to-18500-for-2018
2. https://www.npr.org/2017/12/19/571754894/charts-see-how-much-of-gop-tax-cuts-will-go-to-the-middle-class