A banner year in the practice, outsized commissions, a property sale, a fund distribution — however it happened, your income just spiked, and with it your bracket. A spike year punishes autopilot and rewards planning more than any normal year ever will.
Deductions are worth their most against your highest bracket. Retirement plan room, charitable timing, gain-and-loss pairing, entity decisions for the self-employed — all of it does double duty this year, and almost none of it can be done retroactively.
You can't plan against a number you don't know. A current-year tax projection — not last year's return — is the foundation every other decision stands on.
For business owners and the self-employed especially, the right plan design can shelter dramatically more than a default 401(k) contribution. Spike years are what those designs are for.
Bunching several years of intended giving into the high-bracket year — often through a donor-advised fund — multiplies the value of generosity you already planned.
A big realized gain can be paired with loss harvesting, timed against other income, or — in some cases — deliberately taken now if this year is unusual in the other direction. The pairing is the plan.
Our Director of Strategic Tax Planning is a CPA who sits at the same table as your advisor — so the tax strategy and the investment strategy are one strategy. That's the whole point of the firm.
Educational only — not investment, tax, or legal advice. Every situation is different; the right answer depends on the numbers, and that's what the strategy session is for.
Sit down with a fiduciary — not a salesman — and leave with a complimentary strategy for your exact situation, whether or not you ever hire us.