How to Get the Most out of Your Tax Plan
Time to Think About Your Tax Plan
With the April 18th tax deadline fast approaching (thanks to Good Friday for the extra time), you’re likely ready to be done with taxes altogether. But even as you file last year’s return, it’s not too early to start planning for next April.
Yes, plan. With some extra knowledge and help from a professional financial advisor, you can make a strategy that saves you money — and headaches.
The following tax-saving strategies won’t apply to everyone, so remember: even though it sounds smart, it may not be right for your situation. And if you’re a business owner or entrepreneur, you may have access to even more options. For deeper insight, our guide for entrepreneurs is a great place to start.
If you're unsure what strategies fit your situation, schedule time with a NEST financial advisor to build a custom tax plan. For now, here are a few ideas that may help you reduce or defer taxes as you plan ahead:
Using Long-Term Gains and the 0% Tax Rate
If you fall within the 15% federal tax bracket, your long-term capital gains may be taxed at 0%. Holding taxable assets longer can help you benefit from this rule. Always track your holding periods and evaluate tax liability before selling investments.
Tax-Loss Harvesting
Tax-loss harvesting is the strategic selling of securities at a loss to offset gains taxes.
It’s usually done toward the end of the year but can happen at any time before December 31. A few key points:
Only applies to taxable accounts
Limited to $1,500–$3,000 annually
Doesn’t benefit lower tax brackets as significantly
Losses must be harvested before the calendar year ends
Making IRA Contributions
IRA contributions (both traditional and Roth) can be made up to the tax-filing deadline. A traditional IRA lowers your taxable income for the year, while a Roth IRA allows you to withdraw tax-free in retirement.
You can check contribution limits here and consider splitting contributions between both types to balance short-term savings and long-term planning.
Using the "Backdoor" Roth
If your income disqualifies you from direct Roth contributions, you might still be able to benefit via a "backdoor" Roth IRA. This strategy allows you to:
Contribute post-tax dollars to a traditional IRA
Convert those funds to a Roth
Pay taxes only on the growth at the time of conversion
Since income limits don’t apply to Roth conversions, this approach is ideal for high earners.
Exploring Tax-Deferred Vehicles
We're not talking about your car. We're talking about tax-deferred investment vehicles like:
401(k)s (pre-tax)
Roth IRAs (post-tax)
These allow for triple compounding:
Interest on principal
Interest on interest
Interest on money that would've gone to taxes
You can grow your nest egg faster by deferring taxes — and minimize liabilities later.
Final Thoughts
Don’t wait until the end of the year to think about tax-saving moves. Building an optimal tax strategy takes time, planning, and alignment with your personal goals and income situation. Whether you're aiming to max out IRA contributions, leverage capital gains, or navigate backdoor Roth strategies, there’s a lot to manage — but you don’t have to go it alone.
Connect with our financial planning professionals by scheduling a no-obligation call. At NEST, we’re dedicated to helping Austin-based individuals, families, and business owners make their money work smarter — now and in the long term.
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DISCLAIMER: This article is for educational purposes only. It is not financial planning or investment advice. For guidance about your unique goals, reach out to info@nestfinancial.net.