When you’ve worked hard to build wealth, the last thing you want is to see it chipped away by taxes for which you could have planned. Whether you’re still growing your portfolio or you’re already retired and drawing income from your assets, smart tax planning can make a meaningful difference in your long-term financial picture.
At First Wealth & Trust, we regularly advise clients in the Winter Garden area who are looking not just to grow their wealth, but to keep more of it. And while everyone’s situation is different, there are a few foundational strategies that wealth-building families should have on their radar.
1. Understand the Tax Impact of Your Investments
Not all investment income is taxed the same way. Interest from bonds, dividends from stocks, and capital gains from selling investments can all be taxed at different rates. A thoughtful investment strategy isn’t just about return—it’s also about how those returns are taxed.
For example, holding certain investments in a tax-advantaged account like an IRA or 401(k) may help defer or reduce your tax liability. On the other hand, if you’re selling appreciated assets, timing matters. Holding onto investments for over a year typically means you’ll pay the more favorable long-term capital gains tax rate, rather than the higher short-term rate.
2. Make the Most of Tax-Advantaged Accounts
Tax-deferred retirement accounts, such as traditional IRAs, 401(k)s, and SEP IRAs, allow you to reduce your taxable income today while deferring taxes until retirement—when you may be in a lower tax bracket. Roth accounts, while not tax-deductible up front, offer tax-free growth and withdrawals down the road.
If you’re still working and eligible to contribute to these accounts, maximizing contributions each year is one of the most effective ways to reduce your tax burden while building for the future.
3. Plan for Required Minimum Distributions (RMDs)
Once you reach age 73, the IRS requires you to begin withdrawing a minimum amount each year from most tax-deferred retirement accounts. These Required Minimum Distributions are taxable—and can significantly increase your annual tax bill if you’re not prepared.
That’s why it’s essential to plan ahead. Some clients choose to begin drawing down these accounts gradually in the years leading up to age 73 to minimize future RMDs. Others use Qualified Charitable Distributions (QCDs) to donate up to $100,000 per year directly from their IRA to a qualified charity, satisfying their RMD without increasing taxable income.
Every situation is unique, and strategies like Roth conversions, QCDs, and income-spreading should be reviewed as part of a broader retirement income plan.
4. Don’t Overlook Gifting and Estate Tax Planning
Gifting assets during your lifetime—either to family members or charitable causes—can help reduce the size of your taxable estate. The IRS allows annual tax-free gifts of up to $19,000 per recipient in 2025, and larger lifetime exclusions can apply as part of an overall estate plan.
In addition to gifting, strategic use of trusts and other estate planning tools can help minimize estate and inheritance taxes, especially for those with more substantial assets.
5. Work With a Tax-Aware Advisor
One of the most important things we tell clients is this: tax strategies don’t exist in a vacuum. They need to be integrated into your overall financial plan—aligned with your investment approach, your estate plan, and your long-term goals.
At First Wealth & Trust, our approach to tax planning is proactive, not reactive. We help you look ahead, weigh your options, and structure your wealth in a way that’s not only smart today but sustainable in the years to come.
Let’s Make Sure You’re Keeping More of What You’ve Built
If you’re unsure whether your current tax strategy is working as hard as it could, now is a good time to revisit it. Whether you’re approaching retirement or managing a well-established portfolio, we’re here to guide you with clarity, confidence, and a long-term perspective.
Let’s talk about how to protect your wealth, not just from market fluctuations, but from unnecessary tax exposure as well. Call us at 352-385-2121.
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