A unified approach to your tax strategy.
Tax planning at James Walter runs through every plan we build, in coordination with your CPA. We do not prepare returns and we do not replace your accountant. What we do is make sure the investment and income decisions made all year long are optimized for taxes.
Planning that looks forward, in coordination with your accountant.
For high net worth families in Pennsylvania, the tax decisions that actually move the needle happen throughout the year, not at the end of it. By the time a return is being prepared, most of what could have been done is already history. Our role is to work the future side of the equation, alongside your CPA.
Your CPA reports what happened in the past. We help decide what happens in the future, while there is still time to adapt and adjust.
Five places the real planning lives.
For high net worth families in Pennsylvania, the meaningful tax planning tends to live in a handful of places.
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Roth Conversions
Between retirement and required minimum distributions, many of our clients sit in artificially low brackets for a few years. Converting traditional IRA dollars to Roth during that window can permanently remove future RMDs and their tax drag.
But the modeling has to be honest. Each conversion stacks on top of your other income, can trigger the 3.8% net investment income tax, and can push you over a Medicare IRMAA threshold that raises your future premiums. A conversion plan that ignores IRMAA is an avoidable mistake.
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The Business Sale Year
The year you sell a company can be the highest income year of your life, which makes it both the worst year to take more income and the best year to take deductions. Charitable bunching through a donor advised fund, timing the closing across tax years, installment structures, and state residency questions all belong on the table before the letter of intent is signed.
It is a core part of how we think about exit planning. See also 7 mistakes to avoid when selling your business.
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Charitable Strategy
For families who give, how you give often matters as much as how much. Donating appreciated stock instead of cash avoids the capital gain entirely. Qualified charitable distributions from IRAs after age 73 satisfy RMDs without touching your adjusted gross income. Donor advised funds let you take the deduction in a high income year and grant the money out over a decade.
More on charitable giving.
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Asset Location
Which investments live in which account type is a decision most portfolios never actually make. Not to mention, the order of distributions. Growth assets belong where the growth escapes tax. Getting the location right adds return without adding risk.
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Pennsylvania Specifics
The flat 3.07% rate, the treatment of retirement income, and the inheritance tax all change the math relative to neighboring states. We go deep on the retirement side of that on our Chester County retirement tax page, and coordinate the transfer side with your estate plan.
Your accountant looks back. We look forward.
Your CPA looks backward with precision. We look forward with them. In practice, that means we model the multi year picture, coordinate on conversion amounts and charitable timing before year end, and make sure nobody finds out about a big decision in February, when it is too late to do anything about it.
Clients with strong CPA relationships keep them. For everyone else, we are happy to make an introduction.
The best tax planning is boring on purpose. Nothing dramatic happens in April, because the work was already done in October.
High net worth tax planning, answered.
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Do you prepare tax returns?
No. We do the forward planning and coordinate with your CPA, who prepares the return.
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What is IRMAA, and why does it keep coming up?
Income-Related Monthly Adjustment Amount. If your income crosses certain thresholds, Medicare charges you higher premiums two years later. Crossing a threshold by one dollar triggers the full surcharge for the year, which is why conversion and withdrawal planning has to respect the cliffs.
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Is a Roth conversion right for me?
Sometimes. It depends on your current bracket, your future RMD picture, your heirs' tax situations, and your IRMAA exposure. It is a math problem, and we do the math before recommending anything.
See what a forward tax plan looks like.
Schedule a short introduction. Tell us the days and times that work and what you would like to cover, and we will follow up.
Or call 610.731.8066
We do not provide tax or legal advice.