Treat tax planning as a year-round discipline with quarterly reviews rather than an annual filing exercise Project your income, gains, and deductions early in the year and update those projections each quarter Coordinate tax-loss harvesting, Roth conversions, and charitable giving with your overall financial plan Ensure estimated tax payments and withholding are sufficient to avoid penalties and April cash flow surprises A team approach with your financial advisor and CPA working together produces the most tax-efficient outcomes

Year-Round Tax Planning

Curated by: Rubric Advisors

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Why Year-Round Planning Matters

Most tax-saving opportunities expire on December 31 and cannot be captured retroactively at filing time
Proactive planning throughout the year can reduce your effective tax rate by optimizing the timing of income and deductions
A reactive approach often leads to missed opportunities for Roth conversions, harvesting, and charitable giving
Coordinating with your financial advisor and CPA during the year produces significantly better outcomes than April surprises

Q1: Set the Foundation

Review your prior year return to identify planning opportunities and adjust withholding for the new year
Confirm 401(k) contribution elections, HSA funding, and mega backdoor Roth setup with your employer
Estimate your expected income for the year including bonuses, RSU vests, and any asset sales
Set up quarterly estimated tax payments if you have significant income not subject to employer withholding
Establish a tax-loss harvesting watch list for your taxable investment accounts

Q2-Q3: Mid-Year Check-In

Compare actual income and withholding against your annual projection to catch any shortfalls early
Review realized capital gains from RSU sales, option exercises, or portfolio rebalancing year to date
Execute tax-loss harvesting in your taxable accounts during any mid-year market pullbacks
Model a Roth conversion to determine the optimal amount to convert based on your projected tax bracket
Assess whether bunching charitable deductions into the current year versus next year produces a better result

Q4: Year-End Optimization

Finalize tax-loss harvesting before December 31, being mindful of the 30-day wash sale rule
Make charitable contributions of appreciated stock or fund a donor-advised fund before year end
Accelerate or defer income if you expect a meaningful change in your tax bracket next year
Confirm all retirement account contributions are maximized including 401(k), IRA, and HSA
Review your estimated tax payments and adjust your final Q4 payment to avoid underpayment penalties

Estimated Tax Payments

Quarterly estimated payments are due in April, June, September, and January of the following year
You must pay at least 100% of last year's tax or 90% of current year tax to avoid underpayment penalties
High earners with AGI over $150,000 must pay 110% of prior year tax through safe harbor provisions
Increasing W-2 withholding in Q4 can be more effective than a lump sum estimated payment for penalty avoidance
Use your mid-year projections to right-size payments rather than relying on last year's figures alone

Key Takeaways

Treat tax planning as a year-round discipline with quarterly reviews rather than an annual filing exercise
Project your income, gains, and deductions early in the year and update those projections each quarter
Coordinate tax-loss harvesting, Roth conversions, and charitable giving with your overall financial plan
Ensure estimated tax payments and withholding are sufficient to avoid penalties and April cash flow surprises
A team approach with your financial advisor and CPA working together produces the most tax-efficient outcomes

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Why Year-Round Planning Matters

Q1: Set the Foundation

Q2-Q3: Mid-Year Check-In

Q4: Year-End Optimization

Estimated Tax Payments

Key Takeaways

Related Topics

Tax Alpha: How Tax Management Adds Returns

Tax-Loss Harvesting: A Complete Guide

Year-End Tax Planning Checklist

Why Year-Round Planning Matters

Q1: Set the Foundation

Q2-Q3: Mid-Year Check-In

Q4: Year-End Optimization

Estimated Tax Payments

Key Takeaways

Related Topics

Tax Alpha: How Tax Management Adds Returns

Tax-Loss Harvesting: A Complete Guide

Year-End Tax Planning Checklist