The first rule of thumb as you start out in personal finance is to maximize every opportunity you have to grow your money in tax-advantaged accounts: 401ks, IRA, HSAs, and the like. Contributing to these accounts not only reduces your taxes, but it also can allow you to grow your capital quicker because you aren’t losing a portion to taxes.

As you progress in your career and your earning power, you may find yourself shut out from some of these options, which often cater to lower-to-middle income earners.

But the general principle of seeking as much tax efficiency as possible should still stand. We all love our country and should be glad to pay our fair share of taxes. That said, we need not lose sleep over not paying a penny more in taxes than we owe. After all, you’re always free to contribute additional donations to the U.S. Treasury by simply writing a check.

For most of us, however, we can surely think of many more ways to spend our money effectively – and even do good through charitable giving – than we could by sending it to Uncle Sam.

Minimizing your tax bill will take some work as the most higher-net-worth individuals will invariably be forced to hold the majority of their assets in taxable accounts. The higher the stake, the higher potential for a sizable bite to be taken out of your capital gains.

This reality underscores the value of a strategic-thinking wealth advisor, who can help you to take advantage of opportunities in using capital losses to offset capital gains – and helping to minimize your tax burden.

For most business owners this comes in the form of retirement plans: namely their 401k and a defined benefit plan. For others that qualify a captive insurance company may be a good option for wealth creation and additional business protection.

As you may have followed, there has recently been a flurry of discussion on Capitol Hill about simplifying the tax code and cutting rates for both corporations and individual investors.

I would caution you to follow these deliberations with a comparable level of interest you may reserve for other policy issues that you care about. Once you reach a certain age, you arrive at a few conclusions about the legislative process as it relates to taxes in particular.

Many concepts and ideas are perennially thrown about – raising or lowering the amount of pre-tax income that can be allocated to a 401k, adding or removing various deductions, etc. There are robust and very organized stakeholder organizations that have a heavy interest in maintaining each of these features of our tax code. The flurry of debate ultimately is much less important than the final bill that is signed by the President.

Tax cuts are one matter – a policy issue that can be relatively easier for legislators to pass. After all, who doesn’t like having their taxes lowered? Unlikely you’ll lose many popularity points for that decision!

What is much thornier is the concept of “tax reform” – as in larger structural changes to our tax code that will affect long-term consumer behavior and incentives.

Most observers agree that our current tax system is far too complicated for the ordinary citizen, riddled with exemptions and provisions that few of us can understand on our own. For that matter, one group that will almost always solidly line up behind the status code are professionals who make their living advising on taxes – frankly, it is a boon for business that most ordinary people have little choice but to consult with a tax advisor if they hope to avoid accidentally misfiling their taxes and risking the chance of being audited.

But even with this general consensus that the tax code is too complex, you can always find a rational argument in favor of any exemption. Non-profits point to the largesse they receive by benefit of charitable deductions. Real estate professionals argue that the mortgage interest deduction puts home ownership into reach for a wider swath of citizens. And countless self-employed entrepreneurs rely on those deductions for personal equipment and their home office to help keep their budget in line.

My general guidance to clients is to not take their eye off the ball – yes, there will be some shifts in your investing and finance decisions based upon the final language in legislation that’s passed. But the essential goal posts for the game will remain the same – developing your talents in a vocation or area you’re interested in, save aggressively to fund your dreams for the future, put your money to work, and protect your earnings with the counsel of trusted financial advice. Don’t let the chatter in Washington distract you from your primary focus.

For most clients the goal is to shift how the income is earned so that you are taxed on capital rather than labor. Doing so places you in a much lower tax bracket, thus allowing you to keep more of the money you earned. The challenge of course is structuring and contributing to the available vehicles in a way that makes sense for your business and investment goals.

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