In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss four powerful tax strategies you can start looking at now to lower your 2025 tax bill and create more long-term flexibility in retirement. They unpack the difference between simple tax filing and true tax planning, walking through how proactive tax projections, IRA tax planning, and coordinated strategies can help reduce taxes over your lifetime—not just this year. You’ll hear how their team uses a comprehensive tax checklist and planning process to help you secure your retirement and avoid costly surprises.

Listen in to learn about practical ways to reduce taxes, from Qualified Charitable Distributions (QCDs) and Donor Advised Funds to Tax Loss Harvesting inside a Direct Indexing strategy, and long-term Roth conversion planning. Whether you’re focused on charitable giving strategies, concerned about Medicare IRMAA surcharges, or just looking for tax savings tips and ideas on how to save on taxes in retirement, this episode will help you think beyond April 15 and build a smarter, more intentional retirement tax plan.

In this episode, find out:

·     The key difference between tax filing and true tax strategy—and why tax moves to lower your 2025 bill must be done before December 31.

·     How Qualified Charitable Distributions (QCDs) can lower your taxable income, satisfy Required Minimum Distributions (RMDs), and help you avoid Medicare IRMAA surcharges.

·     Ways a Donor Advised Fund can “bunch” charitable giving, turn what you were already going to give into a bigger deduction, and enhance your overall charitable giving strategies.

·     How a Direct Indexing strategy with ongoing Tax Loss Harvesting can create “tax alpha,” making your brokerage account more tax-efficient and reducing capital gains over time.

·     Why a multi-year Roth conversion plan—guided by tax projections—can dramatically lower lifetime retirement taxes for you and your heirs, and support a more confident retirement planning and retiring comfortably strategy.

Tweetable Quotes:

“Real tax planning is not about what happened last year—it’s about using tax projections and tax strategies today so you can decide how and when you want to pay taxes over your lifetime.” — Murs Tariq

“When you combine tools like Qualified Charitable Distributions, Donor Advised Funds, tax loss harvesting, and Roth conversions, you’re not just checking a tax box—you’re building a coordinated tax plan that can help you save on taxes and truly secure your retirement.” — Murs Tariq

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!”

To access the course, simply visit POMWealth.net/podcast.

Here’s the full transcript:

Thanks for tuning in to the Secure Your Retirement podcast. I’ve got a great episode

for you today. I say I, normally I’m joined by Radon or Nick Hymanson or Taylor

Wolverton. But today we are knee deep in meetings when it comes to tax strategy.

And so, I’m going to be relaying some of the information today as far as what tax

strategy means. And more specifically, what are some tax moves that you could be

making to lower your 2025 tax bill? To set the stage here a little bit,

I want to explain what the difference between tax filing and tax strategy is. A lot

of times we say we’ve got a CPA that helps us with taxes. Where in reality,

if you think about what that relationship is for most people is, we get around to

say February of the following year and our documents start coming in the mail,

1099s, W -2s, other tax documents, and we gather those up and we get them over to

the CPA. And then the CPA has a little bit of back and forth with you more

verifying the information and then they put together the tax return, send it over to

you for your review and for your signature. You may make a payment, you may expect

a refund, and then there you go, taxes are filed. And that’s what most people have

a relationship with when it comes to a CPA. In fact, I was on a phone call

earlier today with someone who said, and they attended one of our events and we

talk about tax strategy and he said my CPA doesn’t do any of what you guys talk

about they do exactly what I just described which is get the documents prepare the

return file the return no advice given and you know we set out years ago to

change what tax strategy really means to us and to our clients and so what

that is really developed into is a very in depth look into your taxation.

And the key here is that we do this, this whole process, this whole exercise prior

to the calendar year flipping over. So, you know, we don’t wait till April of the

following year when your taxes are due. We want to have these conversations before

December 31st. Why before December 31st? Well, a lot of tax strategy has to be

implemented before the end of the year, not by tax filing time, but by the end of

the calendar year. And that’s often a misstep that we want to avoid because there’s

a lot of opportunity on the table, especially given here recently with the passing

and the extension of our tax rates with the one big-beautiful bill act that we’ve

talked about here on the podcast. The opportunity continues. Now, whether, however you

feel about that bill itself, it’s been controversial to a degree. The fact of the

matter is it’s here. So, let’s take advantage of the tools that come with that.

with Taylor, and you’ve heard of Taylor Wolverton on our team, she’s a certified

financial planner as well as an enrolled agent. Enrolled agent is recognized by the

IRS as someone who understands personal and business tax. And so, what she does and

she leads our tax team and tax strategy is we’ll meet with clients and understand

what their prior year tax returns have looked like to get an idea of what their

tax scenarios are and then she’ll build out a well here we sit in 2025 so a 2025

tax projection to say hey if everything goes the way we think it should go from an

income perspective capital gains perspective all these different things that can play

with your taxes if everything goes the way it should here’s a projection as far as

what you’re going to owe or not oh come April of next year so just So just making

a bottom-line type of projection. What that allows for now is the entrance of tax

strategy by saying, hey, if we make these tweaks or do these types of transactions

or move our withholdings up or down, it will make our tax life a little bit

simpler or better for short -term planning as well as for long -term planning. And

I’ll explain what that means in here in a little bit. And so, she starts to make

projections based off of opportunities that are seen whether it’s different types of

investment strategies or different types of charitable giving strategies that I’ll talk

a little bit more about here in a minute. And what the feedback has been in these

tax strategy meetings from the clients have been, I’ve never looked at taxes this way

before. I’ve always been that person that was, hey, just get it filed. And whatever I owe; it’s

 out of my control. And they walk out of these meetings, one,

understanding our tax code a whole lot better because Taylor will take the time to

educate you on how the different parts of the tax return work and operate together.

And then the other is they start to see and learn and understand a lot of the

missed opportunities that have been happening over the years and start to understand

the value in having these tax conversations that a CPA is not typically willing to

have with you one a CPA is a very high transaction type of business where they

make their money is by filing the tax return they don’t necessarily have time to

come up with strategy for every single person because when it’s tax time they are

filing hundreds if not thousands of tax returns in a short period of time so that

is what they need to be focused on well in our world in the wealth management

space in financial planning and retirement planning we are very relationship -based. We

want to know our clients, understand our clients, and do everything we can to make

their life a little bit better when it comes to risk income, planning, tax strategy,

estate plan, and everything that is required for a quality retirement life. And so

we’re able to spend a little bit more time. We’re able to have the expertise and

bring in the specialists that understand whatever we’re looking at so that we can

now start to develop and make these plans a little bit better over time. So, with

that setup, let me walk you into a handful of different things that are coming out

of our tax strategy meetings. Taylor is actually in tax strategy meetings all day

today, along with our wealth advisors, whether it be Nick Hymanson or Ben Burgess.

But we asked her to put together what are the most common things that she’s seeing

when it comes to end of year tax planning for our clients. Now there’s a I believe

it’s a 70 plus point checklist that Taylor looks through as far as different types

of opportunities and her valuation of the tax return. But at the end of the year,

it really boils down to four major ones that we’re utilizing for our clients. And

so, I want to give you a little bit of insight as to what those are today. The

first one I’ll talk about is what’s called a qualified charitable distribution. I’m

not going to have enough time today to walk you through exactly what that is, but

I’m going to explain why it’s important to understand and look at. So, first thing,

it is a charitable contribution, so we’re giving money away. So, if you are

charitably inclined, this may be of interest to you.

Today, with our tax situation,

there’s not a ton a benefit given to charitable giving because a lot of people are

taking the standard deduction years ago the standard deduction got increased so high

that it made it almost impossible to itemize your deductions and so most people

today are taking the standard deduction well what that doesn’t allow for is getting

true benefit of the charitable contributions that you make throughout the year so if

you are charitably inclined and if, here’s the other caveat, if you are of the age

of 70 and a half and above, if you’re not there yet then just make note of this

strategy, especially if you’re charitably inclined because you will want to utilize it

down the road. So, if you’re charitably inclined and of the age of 70 and a half

and also have, let’s just call it IRA type assets, pre -tax type assets,

then this could be a strategy for you. What this really is, is basically we’re

donating dollars out of our IRA, which in most cases we would pay tax on.

So, let’s just go with an example. If I was to take out $10 ,000 from my IRA,

that’s adding $10 ,000 to my income for the year that I’m going to pay tax on.

Well, if I’m doing it specifically through a QCD, that’s abbreviation for qualified

charitable distribution. If I’m doing it specifically through that mechanism, well then

I avoid adding that $10 ,000 to my tax for the year. $10 ,000 of additional income

goes away for the year. Well, how is that possible? It’s all part of the tax code

and understanding the tax law and how IRAs work. So, if you’re up the age of 70

and a half and above and you typically give to a charity throughout the year,

whether it’s a church or an organization that you believe in. As long as one of

those recognized 501c’s, then you’re eligible to make a qualified charitable

distribution. So that $10 ,000 donation that you would normally make out of the bank

and get no tax benefit from in most cases, now we can take it from our IRA.

It comes out, no taxes on it, and it goes directly to the institution as your

donation. So, two things happen here. One, you get to give the way that you want to

give. And two, we get a tax benefit. We just pulled from our IRA tax free.

It is almost impossible to do that; except we’re really in this type of strategy.

So that’s one to think about. Now, there’s some nuances. There’s some nitty gritty.

There’s some logistics that you need to do right. Bottom line, this has to be fully

completed. When I say fully completed, the dollars have to be in the charitable

organization’s hands before the end of the year. So, you don’t want to do this on

December 25th because you’re not going to get the money to them in time. You really

want to start this process throughout the year. But, you know, November,

we’re getting tight as far as getting this accomplished. So that’s tax strategy

number one that you can do by the end of the year. The second one is still along

the lines of charitable giving. And let’s say you said, hey, I’m not 70 and a half

yet. What can I do to help my taxation?

you do not pay any tax on it. It comes right off. And so, because of that standard

deduction, a lot of people are not in a place where they can itemize deductions

because of the standard deduction being so rich. Well, if we are someone that is

charitably inclined, and let’s go back to that person that gives $10 ,000 a year and

they’re under the age of 70 and a half,

they can now create what’s called a donor advised fund. A donor advised fund is an

account.

So back to that example of $10 ,000 is your usual giving for the year. Well,

what if we said, hey, for for this year of 2025 and for next year,

26, let’s go ahead and make that $10 ,000 donation for this year and for next year.

So $20 ,000 together. Let’s go ahead and put it into that donor advice fund here

before the end of the year. What that’s going to do is give us now a $20 ,000

charitable contribution or a deduction that can now throw us into a place where we

can itemize and all those other expenses that you have can now be utilized in the

itemization of your tax return. So that can be pretty, pretty valuable to someone

who is charitable inclined. You get to name the fund. I think that’s always fun.

You can name it your family

donation fund or your family, whatever you want to call it, basically. But that

makes it nice and fun. Now, the dollars that go into there, you cannot get them

back out and they need to be given out, but there’s a ton of flexibility there.

So, it’s kind of like operating a bill pay. You have checks that are sent out to

various organizations. So, there’s a ton of flexibility. And all we’re doing here is

funding some donations up front so that we can get ourselves into a place of

itemized deduction that helps our tax bill even better. I want to go back real

quick to the qualified charitable distribution. I forgot one major key part of this,

which is so you’re eligible at age 70 and a half. However, when we hit age 73 or

75 or you may already be in it, it’s called required minimum distributions. That’s

the force withdrawal on your IRA assets when you hit that certain age. What’s nice

about the qualified charitable distribution is it applies towards your required minimum

distribution. For example, let’s say you’re required minimum distribution is 20 ,000 for

this year. You give 10 of that away to charities through a qualified distribution

that counts towards the 20 you are supposed to take for the year. So, you give 10

away. You’d have to take the 10 remaining for yourself, that means you only pay tax

on the 10 ,000

requirement of distribution versus the 20 ,000 you would be forced to take because

you gave 10 away as a qualified charitable distribution. So, another really nice piece

about the QCD if we’re using it properly. Okay, so QCDs,

donor advice funds, also abbreviated as DAFs. Another strategy that that it’s more of

implementing is a tax -efficient portfolio management. We call this direct indexing

with tax loss harvesting. In a nutshell, this strategy allows us to mimic an index,

think the S &P 500, but not buying an ETF, which is what most people do, or buying

a mutual fund today, which is what most people do. Instead, we’re going to mimic

the index by buying a bucket of those stocks. It’s usually about 50 to 75 of those

stocks and you may say, well, why would I buy those when I could just buy one?

Well, if I buy one, the ETF, that is the S &P index. And if that, if the index

goes up 20%, my ETF just went up 20%. Fantastic. But I’m sitting in a non

-qualified account or a brokerage account that’s subject to capital gains, interest,

and dividends. And so now I’m kind of stuck with this, this ETF because I don’t

want to sell it because that’s going to cost me in taxes. So, what can I do

differently? Well, the goal here is is we get the return of the index. How the

index has worked today; most are the return is driven by really the top 15 to 20

stocks in the index itself. And in fact, some of the indexes,

the top five to seven. We’ve heard of the magnificent seven stocks kind of carrying

the markets really since the pandemic in 2020, and that story is still pretty true.

So, we don’t have to have all 500 stocks of the S &P 500 to get the return of the

S &P 500. We can mimic the index itself and the movement of the index with just 50

to 75 stocks. Okay, so that explains why we need to buy 50 to 75 so that we can

mimic the movements of the index itself without having to buy 500. Where’s the tax

piece come into play? Well, now if we have 50 to 75 stocks, the question I would

ask to you is, do all stocks go up at the same time? Hopefully, in your head,

you’re saying no. And which is true, some stocks go up, some stocks go down. What

it gives us is a playground, and I use that word lightly. We’re not playing. This

is all technical data -driven types of investing strategies, but in all essence, it

gives us a playground to sell some of those losers while the winners are winning

and taking our performance up, but now we get to bank losses for our taxes.

What this allows for is at the very least offsetting some capital gains and some

types of tax situations that come out of this brokerage or non -qualified type of

account. And then in the perfect world, we also get to use some of those losses

towards our tax return to go against our ordinary income for a few,

up to $6 ,000, which can be very, very helpful on your tax return itself. So direct

indexing with tax loss harvesting, while it sounds big, it is a very neat strategy.

If you have non -qualified dollars and that you feel are not tax efficient and you

keep getting surprised by the 1099 that comes to you in February every year on that

account, this may be something to look into. All right, the last one, and this is

the biggest one that you need to be doing by the end of the year if it makes

sense for your plan. All of these are all strategies that with the caveat of if

they make sense for your plan is the big one, which is Roth conversions. So let me

do this. Let me kind of walk you through some numbers. Because I asked Taylor to

give me some examples, some real -life examples of the tax savings that she’s seeing

by utilizing some of these strategies. And so, I’ve got two for you on the qualified

charitable distribution. So, we had one client reduce their RMD taxation while giving

to their church. So, they had the RMD they had to take. They gave some of that RMD

to the church completely tax -free, and they took the remainder RMD for themselves.

What that resulted in on their tax return was a savings of tax dollars that they

had to pay. It saved them about almost $3,700 in tax they would have had to pay.

This is no product. This is really just understanding strategy and the tax code and

having a team that can help you see what’s best for you. Another family utilizing

QCDs, they were able to lower their taxable income and avoid Medicare surcharges,

which is a massive pain point for anyone that’s ever experienced them.

It’s a surcharge or a, you could call it a tax on your Medicare premiums, part B

and part D if your income is too high. So, what this client, this family was able

to do is reduce their income below Medicare surcharges by giving away some dollars.

What that resulted in is a tax savings of about $4 ,300 for this year.

So those are just two smaller examples or examples in general of how qualified

charitable distributions can affect your bottom line. And when it comes of charitable

giving, if you’re giving,

that’s great if you feel like you should give, but also, I feel like we should take

advantage of what tax benefits are there for us. Okay, on donor advice fund, here’s

a couple examples. We had one family that turned charitable giving into a tax

deduction. So, they did the bunching like I talked about, that example of 10 ,000 for

this year, 10,000 for next year. We’re going to bunch it together into one year,

20 ,000 going into a fund. I don’t know their specific numbers, but the bottom line,

it saved them $14 ,000 in tax by doing what they were going to do anyway. They

were going to give $10 ,000 this year and they were going to give $10 ,000 next

year, but they were going to do it in individual tax years. So, they were going to

give 20 over the next two years either way. What we did was find a way so that

we could make a tax advantage and save them a little bit more money on their

taxes. It saved them $1,400.

We have another example of someone that gives a little bit more, and they wanted to

accelerate their gifting, and so they did more bunching into the donor advised fund.

It saved them $4 ,600 in taxes paid for this year. Or in taxes paid for this year.

And the last one that I’ll speak to is the tax -efficient portfolio, direct indexing

with tax -lost harvesting. If we took a million -dollar account to be tax -efficient,

so rather than just buying a handful of different stocks, and eventually those stocks

or funds or ETFs, getting to a place where we feel handcuffed to them because

they’ve got such good gains in them, we don’t want to sell them because of the

taxation. So, we manage this a little bit more tax -efficient with those buckets of

stocks to represent the index, so we get the index growth, positive or negative,

we’re mimicking the index, but we get tax efficiency along the way. What that really

means is what we’ve seen is that that you generate tax alpha.

Alpha means we’re getting better performance because we’re paying less in taxes along

the way. We generate about 1 % tax alpha in this type of strategy. So, if the index

made 10, well, because of the efficiencies here and avoiding some capital gains tax,

which can reduce your return,

the tax alpha generated makes the total return closer to 11. Index made 10,

we have tax savings about 1%. So, it helps us in the long run, helps our money

stay in our pocket versus giving it to the government. Okay, the last one I’ll talk

about, and this is a big conversation is Roth conversions. These need to be done by

the end of the year as well. 1231 is when they have to be done. Don’t confuse

these with Roth contributions or IRA contributions. That’s really the only good or

decent tax strategy that’s left for you come April is you can put money into your

IRAs even after the calendar year, calendar year has flipped if you qualify for that

tax benefit. What I’m talking about here is a Roth conversion, that is taking money

from your pre -tax IRA type accounts and deciding and making the decision to pay

some tax so that we can get it into a tax bucket called a Roth. So, who

makes decisions to voluntarily pay tax? Well,

not many would do so. And I’m here in here talking about reducing tax and now this

strategy is going to increase my tax for the year. Well, if we understand the big

picture and the why, then it could make a lot of sense. I think today where we

sit, our tax rates are in a lower place. Could they go lower from here? Anything

is possible, but I think most would say it can only go up from here, given the

issues that we’ve got with the national bet and everything else going around us. It

can only go out from here. Like I said at the beginning of the podcast, though we

did get a bit of a break here with the one big beautiful bill act. And the tax

rates are staying consistent for longer and not going up yet. Technically, they’re

permanent. We’ll see what permanent means in the coming years. So, Roth conversion

planning is a long -term tax strategy to reduce our taxes paid lifetime and then and

then if we have desires for legacy to reduce the tax inheritance potential issue

that they may have down the road it’s as simple as this is it way better to

inherit tax free money or is it way better to inherit money that no taxes have

been paid on whatsoever well there’s no magic here someone does have to pay the tax

and that’s done through a Roth conversion, so we had a family come to us and this

is one of one of Taylor’s examples of how she navigated a Roth conversion

conversation with the family.

And so, what they wanted to do is start smoothing out their taxes and start doing

some conversions in a responsible manner so that we avoid Medicare Irma surcharges.

Again, that’s if you make too much income or create too much income, then you may

be thrown into a penalty zone with Medicare Parts D &D. That can cost quite a bit

and be quite a bit of pain. So, what Taylor and the tax team came up with is

we’re going to convert into the 22 % bracket without triggering any Medicare

surcharges.

And what we’re going to do for this year here in 2025, the numbers made sense

based off of the analysis to convert up to the 22 % bracket.

This family was able to say let’s take $66 ,000 from our IRA.

Let’s add that to our taxable income for the year, which means we’re going to pay

tax on it so that we can get that 66 into their Roth account completely taxed so

that it can grow tax -free.

By the way, we’re not doing this for one year where this plan, the numbers, the

projections, the way it works is for this family, we’re going to do this from 2025

all the way through 2033. I’ll put an asterisk here. No plan that we ever make is

set in stone. And so, this tax plan is going to be re -evaluated every single year

in their annual tax strategy meeting with the team because we know very well that

life changes and especially tax law can change on us. And those are things that we

want to make sure that we’re paying attention to year over year. So, this is just a

preliminary type of deal that, hey, if everything works out and nothing changes from

here, we could be doing this for the next eight years. Here’s the big number.

So, on the QCDs, on the donor advised fund, on the, you know, on those, those are

immediate tax savings, but they’re relatively small. Everything is good, but every

number I gave you was kind of in that $1 ,000 to $5 ,000 of tax savings,

which is substantial. You don’t want to forget about it, and you don’t want to

ignore it. But when we do long -term tax planning and realizing that our investments

grow over time and if we have an IRA that was a million when we retired and it

grew to a million and a half, it grew to $2 million, you know, those are all

dollars that have not been taxes paid yet. So, our tax burden continues to grow on

those accounts as they grow.

And so, where the big tax savings, the big dollars, the big, the really long -term

nice planning comes into play is something with these Roth conversion plans. So, if

this family does it from 2025 to 2033 and our tax rates don’t go up,

we’re just projecting, hey, what if tax rates stay the same, their tax savings

lifetime is going to be about $320 ,000. It’s going to save them from paying about

$320 ,000 in taxes over their lifetime if they live to age 90 and 87.

They’re 65 in this story. So, to me, that is big tax dollar savings.

Not only did they save it during their lifetime, but also, we’ve gotten substantial

assets into the Roth account for their next generation to inherit with much less

stress and pain when it comes to taxes. So, I wanted to walk you through these

elements as far as the four tax moves to lower your 2025 tax bill.

And here’s what I would say. If you have an advisor, I’m sure they’re talking to

you about this stuff, but if they’re not, they may not be equipped for it, because

it takes a team; it takes an infrastructure.

And if they’re not having the conversation with you, I would ask them why. Or if

you’d like to have that conversation with us as far as what this tax strategy look

like for you, we are always happy to hop on the phone. Easiest way to do so is

to go to our website, POMwealth.net And from there, you’ll be able to schedule a

consultation. It’s usually a 15 -minute phone call or a Zoom call. We’re happy to

see it in our office as well. We do a lot of educational types of events. We’re

happy to get you to one of those. So, if you have interests in having a team in

place that not only helps you with the investment side, but everything when it comes

to financial planning, when it comes to income planning, tax strategy, estate, health

care, then that is exactly what we do. And that’s what we have strived to bring to

our clients as we built out this thing called the Peace of Mind Pathway. So, if

this is of interest to you, we’re happy to have that conversation. But until then, thank you for tuning in. I hope you enjoy your day.