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5 Best High Net Worth Tax Planning Strategies

Financial Planning, financial advisor San Antonio Sep 12th, 2022 by: Darryl Lyons

Tax planning for high-net-worth individuals is a vital aspect of financial wellbeing. Whether you're an entrepreneur or just getting started in your career, these tax tips can help you prepare for the future and help you get the most out of your wealth:

  1. Plan ahead
  2. Maintain accurate financial records
  3. Claim applicable deductions
  4. Take advantage of employer-paid benefits
  5. Invest in a Texas financial advisor for tax planning and wealth management

By reducing what you owe taxing agencies like state and federal governments, you can maintain more of your net worth. Use this quick guide to navigate the territory.

Ongoing tax planning efforts will also help avoid IRS audits, which can be taxing on the nerves.

 

Tax planning strategy 1: Plan ahead

A critical part of any high-net-worth individual’s financial plan is tax planning in San Antonio, TX. But if you don’t plan, you could end up paying more than you need to. Part of being successful is not putting off to tomorrow, what could be done today, right?

Plan ahead for the inevitable.

How good are you at saving for retirement and other goals? If your answer is “not very good,” it’s time to start thinking about how much money will come into your life and what might be available for distributions from your investment accounts and retirement accounts. Because there are many ways to apply tax strategies, you must know what they are to align your goals and comprehensive financial plan with them.

If your plans are disconnected from tax benefits, you won’t reap them. 

 

Tax planning strategy 2: Keep accurate records

paper calendar with a date circled and the words get organized highlightedIt's essential to keep accurate records because without them, you could be missing critical information for:

  • Tax purposes
  • Business purposes
  • Insurance purposes
  • Estate planning purposes
  • Financial planning purposes
  • Legal purposes

Keeping accurate and thorough records is also beneficial for personal reasons and peace of mind. Being organized is half the battle when it comes to tax planning, so keep it together so that wherever you get support, the professionals will have everything needed to help you succeed.

 

Tax planning strategy 3: Claim deductions that apply to you

It’s probably time to talk about your capital gains tax and adjusted gross income, which can be complex for high-net-worth individuals and families. Tax deductions may apply to you, which are effective ways to reduce your taxable income. The higher your marginal tax rate, the more tax deductions will save you.

Tax deductions come in many forms: standard, personal, and itemized deductions. Your situation and lifestyle determine which type of deduction is best for you. If you’ve been seeking financial firms in Texas to help you get ahead in the tax planning process, PAX has solutions for you!

 

Tax planning strategy 4: Take advantage of employer-paid benefits

Employer-paid benefits are another tax planning strategy that high-net-worth individuals should take advantage of. Aside from various types of insurance, many employers provide retirement accounts. If you are offered this type of benefit, take it! 

You can and should be contributing to at least a traditional IRA. You will be taxed on withdrawals upon retirement, so keep in mind that if you'd like to avoid paying taxes on your money in the future, consider contributing to a Roth IRA

  • If you expect your tax rates to increase gradually (because you will have more income down the road), this is a viable option, which can particularly benefit younger high-net-worth individuals. 
  • Conversely, if tax rates stay the same or decrease with age, traditional IRAs might be more suitable for you.

 

Tax planning strategy 5: Talk to a tax professional.

Texas financial advisors fingers typing on a calculator working on tax-related paperwork

As a high-net-worth individual, you may be considering various financial strategies to help increase your wealth and prepare for the future. It will be wise to work with a financial firm in San Antonio that provides tax services and planning under the same roof. At PAX, we have a whole team to support your financial goals.

Since the best tax planning strategies are those that keep you on track with your financial plan, having a Texas financial advisor as an accountability partner is essential. 

Consider just a few possible benefits of hiring a financial advisor in San Antonio: 

  • Tax professionals can help identify and plan for all of your financial needs—from retirement planning to estate preservation
  • Help reduce your tax burden by identifying any deductions or credits available to offset them
  • Help you save money by providing guidance on how much money should be invested each year to reach specific goals such as saving enough for retirement or college funds


These five steps will improve your chances of tax success.

Tax planning is an integral part of financial management for everyone, but it is significant for high-net-worth individuals. It is vital to treat it as an ongoing process, not a one-time event. The goal is to minimize the amount you owe in taxes and avoid penalties.

The Takeaway

10 reasons to retire in Texas pax financial podcastTax planning in retirement becomes even more strategic. So whether you’re retiring in Texas, already retired, or not even close, you can save money by tax planning and avoiding penalties by:

  • Planning to avoid paying more income tax than necessary

  • Paying your taxes on time or early by making estimated quarterly payments

  • Contributing enough money into retirement plans so that you do not have to pay penalties

  • Using deductions like charitable donations so that you don’t have to pay taxes on these contributions

We hope this article has helped you think about your own tax situation and consider how you can improve it. If you’re looking for more information, we encourage you to reach out to talk with a professional at PAX Financial Group

We are here to help you determine the best strategy for your situation and answer any questions that arise during the process.

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This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

 

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.

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