Tax Optimization

What pros wish you knew about part‑year returns So, here’s the thing: part‑year returns aren’t just shorter versions of full‑year returns. They’re their own sport. If you moved in 2024, worked in more than one state, or had that awkward split‑residency year, the math you end up paying depends less on your total income and more on which state gets to tax which slice, what credit you recieve for taxes paid elsewhere, and the timing of when you became a resident. I’ve seen two people with the same W‑2 pay very different tax bills because one line item was sourced…

Old-school lump sum vs. today’s tax-smart playbook Look, I get it, the classic move after a windfall is to throw it all in the market and feel productive. That used to be fine when cash paid nothing and inflation was quiet. But here’s the thing: in 2025, the first 10% of your return is probably decided by taxes and sequencing, not the fund you pick. Cash yields are still meaningfully positive, inflation risk hasn’t totally gone away, and you’ve got more tax knobs to turn than most people realize. So we’re going to frame the windfall as a series of…

Timing is everything when you’re MFS with both W‑2 and 1099 income Here’s the thing: if you’re married filing separately in 2025 and you’ve got a W‑2 and a 1099, the calendar matters as much as the math. W‑2 withholding doesn’t automatically cover your 1099 self-employment tax, and the IRS doesn’t wait politely until April to judge your payments. The penalty clock runs quarterly: April 15, June 17 (because the 15th falls on a weekend this year), September 15, and January 15, 2026. Miss a quarter or pay light, and you can rack up underpayment charges even if you square…

“No tax due” doesn’t mean “no penalty”, here’s the gotcha “No tax due” doesn’t mean “no penalty.” If you run an S corp, that line is the gotcha that bites, especially right now with extension season closing in, September 15 is staring a lot of owners in the face. Here’s the thing: S corporations often owe no entity-level income tax, but the IRS still charges late-filing penalties that are calculated per month or part of a month and then multiplied by the number of shareholders. It’s in the code (IRC §6699), and it’s not hypothetical. It’s mechanical. So, a simple…

The hidden price of a “good” gain So, here’s the thing: a “good” gain can be bad news for Medicaid. You sell a stock, lock in a tidy profit, your tax bill looks fine on paper… and then you get a notice that your Medicaid eligibility just tripped a wire. It happens more than people think, especially this year. Actually, wait, let me clarify that, it’s not the gain sitting in your brokerage account that hurts you; it’s the moment you realize it (the sale) that shows up in the Medicaid math. Why now? Markets were strong in 2023 and…

Why Timing Beats Almost Everything In Retirement Taxes So, here’s the thing: in retirement, when you pay taxes often matters more than what you own. I know that sounds upside-down, every headline is about the hottest fund or the “right” allocation, but taxes are the quiet line item that compounds against you. Actually, wait, let me clarify that: tax drag compounds just like returns. A little leak, year after year, turns into a flood over decades. Quick example. Suppose a $1,000,000 taxable portfolio earns 6% a year before taxes. If you lose 1% each year to ongoing taxes on dividends,…