Death & Taxes – as the old saying goes, the only two guarantees in life.  While there are many polarizing, unpopular topics in one’s life, no one topic is arguably more polarizing than taxes. As a financial professional providing counsel to clients and their family’s across multiple generations, there is one enduring theme – clients feel / believe that “Uncle Sam” is getting the best of them. 

Interestingly, the feeling is often misplaced and stems from confusion around the tax code, on both a federal and on state level, and how such tax codes impact clients individually. Of course, such confusion is understandable due to the complex and voluminous nature of the existing tax code. Lending to the confusion are friends, family members and colleagues who are equally confused about the intricacies of the current tax code but none the less feel compelled to act as an authority so to speak. 

Truth be told, and while the existing tax code is both complex and voluminous, how the same impacts most individuals and / or their families is fairly simple. After all, for most individuals their income is confined to salary / wages, interest income and dividend income – income sources whose treatment under the existing tax code is clear and simple. That said there are simple strategies that one can employ to lessen their potential tax liability.

The first such strategy is to “work” closely & collaboratively with both your financial and tax professional so as to understand “what” the source of unnecessary taxation is.       

Next, consider the use investment strategies that produce “qualified dividends” as defined by the United States Internal Revenue Code.  Qualified dividends are ordinary dividends that meet specific criteria to be taxed at the lower long-term capital gains tax rate rather than at higher tax rate for an individual’s ordinary income.  

Also, gain insight into the estimated capital gain distributions associated with the mutual funds held in your portfolio.  Most mutual funds companies publish data pertaining to estimated capital gain distributions in November – actual distributions occurring in December. Having such insight would allow one, potentially, to harvest losses specifically designed to mitigate / eliminate gains stemming from capital gain distributions and the taxes associated with the same.

One should check with their tax professional as “carry forward losses” may exist – the same being available to mitigate / eliminate gains stemming from capital gain distributions and the taxes associated with the same as well.

Lastly and perhaps most importantly, engage a financial professional whose advice extends well beyond that of simply investing – instead incorporating short, medium and long-term tax management & reduction strategies designed to maximize wealth across multiple generation.


Plan for what’s next with the professionals of ICG next. ICG next is an innovative, established financial advisory firm located in Wall Township, NJ, serving multigenerational families as they plan for what’s next.

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.

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