The end of tax season? Not if your investments are in good hands.

It’s that time of year when most everyone is breathing a big sigh of relief: tax season is finally over. And no matter how you fared this year, if you’re like most people, you won’t have to think about taxes until next December. The picture is quite different in the world of investment management where, a bit like the sunny beaches of California, there really are no seasons—at least when it comes to taxes. 


A huge part of my job as an investment manager is protecting client assets through tax mitigation strategies. Using the combination of asset allocation and tax harvesting, my goal—year round—is to keep your taxes to a minimum and maintain tax-efficient portfolios. Here’s how it works: 


Of course, there are limitations to these strategies. (Aren’t there always when it comes to taxes?) The tax impact of asset allocation is determined, in part, by the assets held. And tax harvesting is most effective and manageable with individual stocks versus mutual funds. The keys to success are careful analysis of each individual portfolio, a detailed understanding of the individual’s complete financial profile, and detailed forecasting for the market and the tax environment. 


How these factors impact each portfolio isn’t always obvious. For instance, as a former Washington chief of staff, I always have my antennae up for happenings inside the Beltway that may affect our portfolios. In 2013, it made more sense not to offset certain taxes due to the pending increase in taxes as a result of Obamacare.  


Another factor that can shift tax harvesting strategies is the age of the investor. Because estate tax rules calculate capital gains based on the price of a stock on the date of death, it may make sense for elderly investors to hold on to investments that have substantial unrealized capital gains, as this could save thousands of dollars in taxes and add significantly to the legacy passed on to their heirs.


The tax codes are complex (no one has ever claimed that taxes—and tax mitigation strategies—were simple!). But know that when it comes to your investments, “tax season” is a year-round process, and I’m always working for you to keep the bite of taxes at bay. 


Were you hit hard by taxes in 2014? Now is a great time to review your portfolio. Working together, we can identify strategies to help mitigate taxes—not only in 2015, but far into the future of your estate.