Most People Can't Name a Single Tax Strategy They're Using

I've had some version of the same conversation probably hundreds of times at this point. Someone sits down across from me, successful by any reasonable measure, and at some point their tax return comes up. They say the number out loud. There's this look that comes with it — part frustration, part resignation, part quiet wondering if they're somehow doing this wrong.

What I tell them is basically this: you're not doing anything wrong. But this problem is big enough now that you actually have to pay attention to it. I know that's not exciting. I know taxes are probably your least favorite topic. But there are things you can do here that will save you hundreds of thousands of dollars over your lifetime, and that is genuinely worth a few hours of your time and a few thousand dollars in fees to sort out.

That usually lands. Because it's true.

There are things you can do here that will save you hundreds of thousands of dollars over your lifetime. That is worth a few hours of your time and a few thousand dollars in fees to sort out.

The question I always ask

Before I get into any specifics, I ask new clients what tax strategies they're currently using. Just to get a sense of where we're starting.

Most of the time, they pause. Occasionally someone will mention a 401(k) or something else. But more often than not, they can't really name what they're doing or why. That's not because they're unsophisticated. It's because nobody has ever actually walked them through it. They're probably doing something, it's just not proactive and it's not connected to any real plan.

So I'll go through a short list of things we actually work on with people. Things like:

• Cost segregation studies on investment properties
• Health savings accounts, which are genuinely one of the most underused tools out there
• 529 plans — and if you're in a state with an income tax and paying private school tuition, there's often a meaningful pass-through deduction people are leaving on the table (Virginia's $4,000 per-account deduction is a good example)
• Roth conversions if retirement is within the next decade or so
• Mega backdoor Roth for small business owners
• Solo 401(k) instead of a SEP-IRA for solopreneurs — almost everyone defaults to the SEP, and the Solo is almost always the better move

I'll also flag a couple things that tend to catch people off guard later: IRMAA surcharges, which can add real cost to Medicare premiums if your income in retirement crosses certain thresholds, and the new senior standard deduction bonus in the One Big Beautiful Bill Act for those approaching 65. Worth knowing about before it matters, not after.

The reaction I get is almost always some version of: "I had no idea any of that was available to me." And that gap between what's actually possible and what's actually happening is where real money gets recovered.

Tax planning is actually three different jobs

Here's something that might reframe how you think about all of this. Most people treat tax planning as one thing: pay less this year. That's a completely reasonable place to start, and getting a current-year bill down is real and valuable work. But good tax planning is doing three separate things, and they don't always point in the same direction.

The first is tax avoidance — using every legal strategy that applies to your situation. No hesitation here. This is exactly the game you're supposed to be playing.

The second is tax timing. Moving taxable dollars to years when they'll be taxed at a lower rate. Deferring income in high-earning years, converting to Roth when income drops, being deliberate about when gains get recognized. One thing that surprises people: once we've gotten someone's taxable income down to around the 12% federal bracket, we often stop taking additional deductions. We'd rather save those for a future year when they'll offset income taxed at a much higher rate. Counterintuitive, but it matters a lot over time.

The third is tax cash flow management, and it's the one almost nobody has thought about. Knowing when you're going to owe money — sometimes a year or two in advance — and roughly how much. That kind of visibility changes how you hold cash, how you structure investments, how intentional you can be with everything you own. Less exciting than the other two on paper, but honestly where a lot of the most practical value shows up day to day.

The shift that eventually happens

There's a mindset shift I see happen with almost every client as their wealth grows. It doesn't happen all at once — more of a slow transition — but at some point the question changes.

Early on, the question is always: how do I lower this year's tax bill? Totally reasonable. That still matters a lot.

But eventually the more important question becomes: how do I lower my cumulative lifetime tax bill? Those aren't always the same answer. The Roth conversion that costs you a little more this April might save you an enormous amount over a 20-year retirement. The deduction you skip today could be worth far more in three years when your income is higher. The decisions compound, just like everything else does.

I think about this framework every day for the people I work with. For someone with a meaningful tax bill, getting this right over a 20 or 30-year window isn't a rounding error. It's a significant part of your financial life.

If your current advisor is helping you think through it this way, great. If they're not — it might be worth asking why. And if you're curious what proactive tax planning actually looks like in practice, we've written about that too.

This article is for educational purposes only and not individualized tax advice.