Tax Management for High Net Worth Investors –PillarWM

Pillar Wealth Management is a fee-only, fiduciary wealth management company that provides wealth management advice to clients who are looking to invest liquid investable assets of 5 million to 500 million dollars. Our wealth managers can devise tax strategies tailored to the needs of high net worth or ultra-high net worth individuals.To learn more about our tax planning services, schedule a call with one of our experienced wealth managers.

Every high-net-worth and ultra-high-net-worth individual’s financial plan must include tax preparation as a critical component. To have an effective financial plan, you must minimize your tax burden and maximize your opportunity to contribute to retirement funds.In this article, we will help you understand why you need tax management by answering the following questions:

• What is meant by tax management?

• Who can give you tax advice?

• What is the objective of tax management?

• When is tax management done?

• What is the key to successful tax management?

Table of Contents
What Is Tax Management? Why Do You Need Tax Management? Who Can Help You Manage Your Taxes? When Should You Look for a Tax Advisor? The Key to Successfully Managing Your Taxes Tax Management at Pillar Wealth Management

What Is Tax Management?

Now, what is meant by tax management?The management of funds for the purpose of paying taxes is referred to as tax management. Tax management entails timely filing of returns, having accounts audited, and deducting the amount of taxes, among other things.

Tax planning is the method of examining a financial plan or scenario to ensure that all elements work together to ensure that you pay the least amount of taxes possible. Tax efficiency refers to a policy that reduces the amount of taxes you would pay. So, while the two are different, both are important to ensure that you protect your wealth from the unnecessary financial drain.

If you want to read about some of our insights on planning for and managing your taxes successfully, you can request our book,7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning.To get started on managing your taxes, you need to first understand what taxes are and their different types.

Which Taxes Should You Be Concerned About?

A tax is a governmental organization’s mandatory financial fee or payment levied on an individual to finance various public expenses. Some individuals may be unaware of the various forms of taxes they must pay, leaving them shocked when they discover a significant portion of their money has diminished and they have no idea where it went.

The following tax structures are of particular interest to high-net-worth and ultra-high-net-worth investors:

• Progressive Taxes: The progressive taxation scheme is exemplified by federal and state income taxes. It means that the more money you get, the more taxes you’ll have to pay.

• Regressive Taxes: Regressive taxes fall in line with your earnings or are set at a fixed rate. It is also used in the taxation of the social security account.

• Taxes on Capital Gains: When you sell an asset or valuable object, such as a vehicle or jewels, you must pay these taxes. You could be eligible to pay the short-term rate or the long-term rate based on how long you’ve held the asset.

• Consumption Taxes: These taxes, also known as sales or retail taxes, are levied on the products and services you purchase. As you pay them at the time of payment and the government gets them from the manufacturer, they are considered as indirect taxes.

Why Do You Need Tax Management?

With so many financial aspects for you to look after, it is understandable if you’re wondering, “What is the objective of tax management?” To put it simply, tax management helps you retain most of your wealth.

Every investor’s dream is to amass a fortune large enough to allow you to live the life you want without fear of cost overruns. However, unforeseen costs will eat away at your savings over time due to unexpected circumstances. One of these variables can be taxes if you don’t have a proper financial plan or tax plan to refer to.

Affluent families should be concerned about unforeseeable risks and liabilities that could jeopardize their financial well-being. Our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 Million To $500 Million, goes into this in detail and offers tips on how to keep your family safe from financial ruin.

Tax management helps to assist affluent investors in doing just that. They concentrate on lowering the taxable income, resulting in lower tax payments. This enables you to have the majority of your assets and investments. It will be in your best financial interest to employ a financial planner or wealth manager if you choose to use these techniques to reduce your taxes. Our wealth managers are well-versed in tax reduction strategies and strategies that boost your cash flow. You can refer to our Performance Guide, Improving Portfolio Performance: The Shifts Multi-Millionaires Must Make to Achieve Financial Security and Serenity, for more details.

Who Can Help You Manage Your Taxes?

Any advisor can claim to give you tax advice, but it’s always a matter of how trustworthy or appropriate it is for you. Not all financial advisors specialize in this field, even though they might have a sufficient amount of knowledge on it.

Tax advisors and tax attorneys are the experts on taxes and tax planning and management. However, as a wealthy investor, this shouldn’t be your only criteria for hiring one. Taxes impact rich investors differently, and if your advisor is unaware of the consequences and policies that affect you, their advice will fall short of your expectations.

Wealth managers are trained to handle the finances of high net worth and ultra-high net worth individuals. They know which shifts need to be made to optimize your portfolio, something you can read more about in our 5 Shifts Guide, 5 Critical Shifts for Maximizing Portfolio Growth Strategies – For Families Worth $5 Million To $500 Million. Similarly, they know how taxes affect you and which tax-loss harvesting strategies you need to mitigate your tax bill.For expert tax management advice, you can get in touch with one of our wealth managers.

When Should You Look for a Tax Advisor?

You might have wondered, “When is tax management done? “The correct answer is, anytime you want.You can incorporate your tax management into your financial plan to get a head start on your finances.

A tax advisor can help wealthy investors who are going through a major life event, including divorce, marriage, the death of a partner, starting a family, buying a new home, unemployment, retirement, inheriting a large sum of money, or more.

If you’re searching for the best way to transfer your estate to your heirs, tax management can help you reduce estate taxes. If you plan on moving to another state, tax management can help you determine which states are high-tax states and which are appropriate for a person with your financial status. Or, if you believe your tax bill is simply wasting too much of your hard-earned money, tax management can help you consider the right tax avoidance techniques.

A tax advisor can help you achieve your objectives by using tactics that are tailored to your specific situation. They will assist you in determining the appropriate deductions and exemptions, lowering your tax burden legally, and preparing and filing your tax returns. Moreover, they can assist you in calculating the taxes you owe on each asset if you have a diverse investment portfolio.

Wealth managers can anticipate your concerns. They understand that you want to keep the money you earn and not lose it to taxes. Hence, tax management is a core aspect when it comes to our wealth management services. If you’d like to work with one of our fiduciary advisors, you can schedule a meeting through our website.

The Key to Successfully Managing Your Taxes

If you’re already working with a financial advisor on your taxes, or if you’re persuaded to search for one, you might have some reservations. Is your advisor equipped to handle your complex finances? How do you know if your tax strategy is the right one for you? For an in-depth read into successful tax management, you can request our book, 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning, which can prove especially useful if you’re looking to invest more than 5 million dollars.

Here, we will summarize how you can determine whether your advisor is right for you and highlight a few key points you should keep in mind for successful tax management:

1. Determining the Right Advisor

A professional financial advisor is one who is curious and asks questions to obtain accurate details. This is the same professional who has looked over the entire financial picture and needs to know what your short and long-term goals are, as well as provide guidance when addressing your situation.

2. Employing A Variety of Tax-Planning Strategies

In general, no single tax planning technique can lower your taxes. Rather, it is the product of a combination of techniques that yields high investment returns. For example, by judiciously combining accelerated depreciation with tax credits, you can reduce your tax bill in the first year, lowering your overall tax burden.

3. Be Smart with Your Tax Deductions

Tax deductions are not squandered with appropriate tax planning. There are times when you cannot take a deduction the first year since the tax benefits aren’t as significant as they might be if you wait for the next year. Moreover, certain deductions can be postponed by deferring purchases.

4. Putting Off Tax Payments

In certain cases, merely deferring tax payments is the key to an effective tax strategy. For example, there are cases where taxes must be paid, but the year in which they must be paid is highly flexible.

5. Immediate Payment of Certain Taxes

Paying some taxes instantly is more cost-effective than deferring them to a later year, according to successful tax management.This is particularly valid if you are already in a lower tax bracket. In certain circumstances, the best tax policy could be to report income earlier than expected or to postpone an expense.

Tax Management at Pillar Wealth Management

At Pillar Wealth Management, we recognize that you have financial objectives that need more than just high results. Tax minimization, we think, is a critical component of cost management and financial security. Our investment managers have more than six decades of experience assisting clients in lowering their taxes by using techniques that are tailored to their specific financial condition.If you’re looking to invest between 5 million to 500 million dollars worth of liquid assets; we can help you with your tax management. You should set up a consultation with our team for a Wealth Management Analysis tosee where you stand financially.

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