Tricks of the Trade: Six Tax Savvy Moves

Apr 1, 2024 | Financial Planning

Tax season can be an interesting time for investors, but it doesn’t have to be a daunting one.

Whether you are an experienced investor, a solopreneur, a family, or individual looking for financial efficiencies, there are ways to keep more of your hard-earned money in your pocket! Truly, the world of tax planning is riddled with opportunities. And recognizing the tax implications of your financial decisions is vital for maximizing your benefits and returns. Not to mention that being tax savvy also helps you make more informed financial decisions – it’s like having a positive feedback loop towards your success!

Here are six essential tips to becoming more tax savvy:


Invest for Long-Term Capital Gains

Let’s dive into the world of capital gains. There are two forms: (1) short-term gains for investments held then sold in less than a year, and (2) long-term gains for assets that are held for over a year and then sold. Your short-term gains would party with ordinary income tax rates. However, your long-term gains would be treated like the tax VIP. You see, long-term gains enjoy a preferable tax rate ranging from 0%, 15%, to 20%, depending on your level of income.

Utilize Tax-Advantaged Accounts

One of the most effective ways to minimize taxes on your investments is by utilizing tax-advantaged accounts such as 401(k)s, IRAs, and Health Savings Accounts (HSAs). Contributions to these accounts are often tax-deductible or made with pre-tax dollars, which reduce your taxable income. Additionally, earnings within these accounts grow tax-deferred or tax-free — this allows your investments to compound more efficiently over time. However, you should be mindful of any contribution limits and/or withdrawal restrictions to avoid those pesky penalties!

Tax-Loss Harvesting

Time to bust out those financial gardening gloves! After scoring some capital gains, did you know that you can offset them? If you sell a not-so-lucky investment at a loss in your taxable accounts, that loss can offset realized gains in other areas of your portfolio. This is like pulling weeds from your investment garden and putting cash right back in your pocket! Rest assured, you can replant a similar investment later on to keep your financial garden thriving.

Harvest the Joy of Deductions

Above-the-line deductions are like pruners to your tax liability. These could strategically reduce your Adjusted Gross Income (AGI) and even bump you to a lower bracket. Some common deductions are for student loan interest, qualified retirement account contributions, and Health Savings Account contributions.

Sprout Some Savings with Tax Credits

Tax credits can be extra handy by lowering your tax liability directly. Some popular credits are the Earned Income Tax Credit (EITC), Child Tax Credit, and American Opportunity Tax Credit, and Saver’s Credit.

Dip into the Fun World of Tax-Exempt Securities

Imagine a magical realm where you earn income tax-free. Picture this: the interest from municipal bonds is like a superhero dodging federal income tax, and sometimes even state and local taxes. There are also some Money Market Funds (MMF’s) that can join the party – certain MMF’s can offer you tax-exempt income from state and local taxes.

BONUS TIP! Consult with a Tax Professional

A tax advisor could help you navigate the tax code, optimize your investment strategies, and identify tax-efficient opportunities that align with your financial goals. While consulting with a tax professional comes at a cost, the potential tax savings and peace of mind might be well worth the investment.


You can make tax time work for you, not against you. Remember, whether you’re a seasoned investor or just starting out, there are multiple strategies to keep more money in your pocket. From investing for long-term gains to exploring tax-advantaged accounts, there’s a world of opportunity out there. And hey, if you ever feel like you could use some assistance, don’t hesitate to reach out to a tax professional. It might just be the best investment you make.


Here’s to a tax-savvy future!

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Disclaimer: Pring Turner is a Financial Advisor headquartered in Walnut Creek CA, and is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views represented herein are Pring Turner’s own and all information is obtained from sources believed to be accurate and reliable. This information should not be considered a solicitation or offer to provide any service in any jurisdiction where it would be unlawful to do so. All indices are unmanaged and are not available for direct investment. Past performance does not guarantee future results.