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Financial Planning Insights

Year-End Tax Tips for High Net Worth Individuals

By The Chandler & Knowles Team | | 0

It's almost tax time. Those words are not usually associated with a positive thought. That is why it is important to start now getting your tax information organized and take advantage of any last minute tax write-offs. Many high net worth individuals know that a big part of tax planning strategy is to be considering your tax situation all year long. There are, however, a few moves you can make now that will definitely improve your year-end tax results.

New Tax Changes

With the Tax Cuts and Jobs Act that was signed in 2018, tax planning has changed somewhat, particularly for those with a sizeable net worth. While most of the changes are positive, it is vital to understand the short and long term impact of these changes. Here are some of the possibilities to lower taxable income that you should discuss with your accountant:

  • Donate considerably appreciated long-term securities. This can be designated as a donor-advised fund. You will be able to use this donation as an income reduction of up to 30% of your Adjusted Gross Income or AGI. If it goes over the 30%, you can carry the remainder forward on subsequent years’ returns. In addition, you will not have to pay tax on capital gains. The best part is, as long as you choose an IRS-approved charity, you decide when the funds are donated. It does not have to be in the year in which you take the deduction. 
  • Harvesting losses is another way to reduce gains. As you probably know, gains can be offset by capital losses. This reduces your gains so your income level is reduced.
  • Business owners can consider paying out a bonus to themselves. This can be done as a 401(k) contribution on the employer side to qualify the bonus as non-taxable. Additionally, a bonus could be paid towards a Defined Benefit plan, similar to a pension plan. 
  • Estate and Gift Tax changes may be advantageous for high net worth individuals. Changes include an increase in the exemption amount for gift, estate, and generation-skipping transfer tax, and the exclusion limit has been raised to $15,000. 
  • Pass-through entities are now allowed a 20% reduction in qualified income. However, C-Corporations are not allowed the reduction. The corporate tax has been lowered from 35% to 21%.
  • As always, any tax strategy should be under the direction of a professional accountant. Most tax laws have exceptions and understanding the ins and outs is essential to financial security.


At Chandler & Knowles, CPA, we want to make certain you do not pay more than you should in taxes. Our goal is to provide with every available deduction and income reduction available. To accomplish this, our team stays up to date on the latest in tax law and changes. Let us help you navigate the muddy waters of your tax strategy. Call us today to set up an appointment: (817) 406-3917.

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Posted in Taxes, Tax Planning, High Net Worth Individuals

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Chandler & Knowles CPAs is dedicated to serving our clients with an integrated approach to financial success for businesses, families and individuals. Our knowledgable team is committed to providing you with the most detailed information to answer your biggest financial questions and to help make your life less taxing.

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