Tax Savings Strategies

Share with

As we approach tax-filing season, it may be a prudent time to examine some tax savings strategies to consider in the year ahead.

Diversify Concentrated Stock Positions
In 2023, if you held the Magnificent Seven stocks, you might have done phenomenally. The Magnificent Seven include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. However, it might be a good time to consider locking in some of those gains and diversifying so you can continue to capture market gains in 2024, while reducing your concentration risk. On the flip side, those who held stock like Boeing, AMC might already know the risk of holding too much of a singular stock. It’s not too late to diversify those positions either.

Harvest Losses
Tax-loss harvesting is a strategy of selling investments at a loss to offset the amount of capital gains tax due from selling investments at a profit. Any unused loss in the current year can be rolled forward into future tax years, or used to offset ordinary income up to $3,000 annually. Loss harvesting is also a good strategy to help diversify a concentrated stock position without paying more in taxes than necessary.  

Maximize Charitable Giving
There is a range of charitable gifting options that might help you support your favorite organization and yield you a tax savings at the same time. Strategies may differ depending on if you take the standard deduction or itemize your deductions. You can also accelerate your anticipated lifetime charitable gifting tax deductions into a year you need the deduction the most with a Donor Advised Fund.

Distribute Efficiently
Asset location is a tax-minimization strategy that considers the tax treatment of different investment accounts and divides assets strategically to maximize tax efficiency. For example, long-term capital gains on stocks in an after-tax account can qualify for a preferential 15% tax rate, and losses can be realized to create tax savings. Therefore, you may want to consider putting equity investments in a taxable account, and hold bonds in tax-deferred accounts.

Each of the strategies above should be reviewed with your CPA/PFS™ and Certified Financial Planner™ before proceeding to ensure they are appropriate and implemented correctly. Reach out to your financial partners early to take advantage of potential opportunities this year.

The commentary on this website reflects the personal opinions, viewpoints and analyses of Kondo Wealth Advisors, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Kondo Wealth Advisors, Inc. or performance returns of any Kondo Wealth Advisors, Inc.  Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Kondo Wealth Advisors, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.