Tax Planning

Find out how to reduce your federal and Virginia income taxes.

According to research from the Tax Policy Center, the top 20% of income earners in the United States paid 69% of income taxes. So, if you earn more than $115,000 per year, this means you are paying the bulk of taxes in our country.

While paying more than your share of taxes may feel like your patriotic duty, for many investors, reducing your current and future tax burden can be a significant goal when planning for retirement.

Personal tax planning with Covenant Wealth Advisors is a specialized service that helps you better manage taxes leading up to and through retirement. We do this by analyzing your tax returns and income sources. Then we create personalized tax strategies to reduce your taxable income.


Unlike filing your taxes, which is a rear-view-mirror, reactive approach to taxes, tax planning is a forward-looking, proactive approach to tax reduction. Both are important, which is why we'll collaborate with your CPA before implementing any tax planning strategies.


If you are within ten years of retirement, tax planning has the potential to reduce your taxes and provide better control over your taxable in come in retirement. 



I want to reduce my taxable income in retirement.

There were over 5,000 tax code changes between 2002-2012. Tax planning can help you take advantage of the latest tax laws to reduce your tax liability. From Roth IRA conversion strategies, to tax-loss harvesting on your investments, to state and federal tax credits and deductions, to income smoothing in retirement, tax planning can help.

I want to avoid Social Security and Medicare "tax traps". 

IRA withdrawals can cause the taxation of Social security benefits, and push taxpayers into a higher marginal tax rate. Just as bad, higher income (i.e. drawing down assets for income) can cause potentially hundreds of dollars a month in extra Medicare premiums.

I want know which accounts to tap first for retirement income.

You must plan how and when you will use taxable, tax-deferred, and tax-free assets to manage your income
and tax brackets efficiently. Knowing which accounts to draw down first can help reduce your overall tax burden.

I want to reduce taxes on my investments. 

According to research from Vanguard, tax-managed investing has the potential to increase returns by upwards of 0.75% per year. On a one-million-dollar portfolio, that's a savings of $7,500 per year! But, most investors aren't aware of the all the tax strategies available. We can create a personalized strategy to mitigate current and future taxation on your investments. 

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