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Published on: 02/02/2022

Should Your Tax and Financial Advisor Help With Your Tax Planning?

Working with a tax and financial advisor can be extremely advantageous for your overall tax plan. Not only does it help to minimize tax losses across various areas of your total financial plan, but it can also improve your investment strategy, helping you meet your short and long-term financial goals.

Avidian Wealth Solutions is a Houston-based fiduciary wealth management firm that specializes in leveraging tax strategies for high-net-worth individuals. In this article, we are going to walk you through four reasons we believe you should let your financial advisor help with your tax planning.

*Please note that while Avidian Wealth Solutions is able to work with your existing team of tax advisors to create a customized tax strategy unique to your goals, we are not a tax filing service.

Why should your financial advisor do your taxes?

1. They have a comprehensive understanding of your finances.

Tax preparation and tax planning are two very different parts of managing your taxes. And while you should let your tax and financial advisor handle both, tax planning is what sets you up for legitimately minimizing your tax liability. A good tax strategy takes into consideration multiple facets of your comprehensive financial plan throughout the year. And who knows that plan better than your wealth manager? By working on your tax strategy with your financial advisor, you can feel confident that all areas of your financial plan are being distributed in a tax-efficient manner.

2. It can save you money.

Why is tax planning an important part of financial planning? Tax planning is an important part of financial planning because of one very important fact. It can help save you money. Your tax and financial advisor can help you maintain appropriate tax credits, monitor capital gains tax, suggest tax-efficient charitable giving accounts, and plan for your retirement all with the goal of saving you money come tax season. 

3. They can strategically review your previous tax returns.

If you know what to look for, your past tax returns can help you establish a tax plan for the next year that maximizes your savings — particularly if you’re paying too much in taxes at the end of the year or are getting too much back. Working with your financial planner Is one of the most efficient ways to identify missed opportunities on your tax returns as they’ll know what to look for and be able to help incorporate better strategies moving forward.

4. Tax planning can help to optimize your investment portfolio.

From tax gain harvesting to minimizing capital gains tax and asset allocation, working with a tax and financial advisor on your tax strategy can be a calculated way to step up your investment game. As anyone well-versed in the stock market knows, different types of investments — such as stocks, bonds, and exchange-traded funds (ETF) — can have different types of tax advantages. Weighing out the advantages versus the disadvantages of various investments with your financial advisor can help shrink your taxable income.

What is the difference between a tax advisor and a financial advisor?

For some people, their financial advisor and their certified public accountant (CPA) or tax advisor are two different people who may occasionally touch base. Your tax advisor may handle responsibilities such as tax preparation and filing your tax returns while your financial advisor focuses more on offering services like tax-efficient investing, estate planning, or retirement planning. Although in most cases, your financial advisor is also certified to be your tax advisor.

While having two separate, certified financial professionals may work for some, we recommend working with a wealth manager who is able to incorporate all aspects of your financial plan including tax planning for the same reasons we recommend letting your financial planner do your taxes — they can create a tax strategy that puts you in the best position to meet your long-term financial goals.

Continue Reading: What happens to your tax liability with proper financial planning?

Avidian Wealth Solutions offers effective tax planning for high net worth individuals and families in Houston

Tax reduction strategies should be a critical part of your financial plan and you should be working with your tax and financial advisor on incorporating them at the start of each year. Together, you can work towards ensuring that all areas of your financial plan are working towards reducing your tax burden.

If you’re looking for tax planning in Houston look no farther than Avidian Wealth Solutions. We are a fiduciary financial firm that helps high-net-worth clients with everything from providing tax return support to business owners to helping individuals establish a tax-efficient investment portfolio. Our team of multidisciplinary, certified financial experts can work with your established financial team to leverage efficient tax strategies and solutions.

To learn more about how we can help with your tax planning, request a meeting with a financial advisor today.

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