• Finetune withholdings. This helps avoid a big tax bill next April or depriving yourself of the use of the eventual refund money for the rest of the year.
One strategy timely right now is Roth conversions. “Since most assets have dipped in the last four months, making the conversion now means that the amount you pay tax on is much less than it would have been before the dip,” Garry said.
“Roth funding and conversion are an ideal mid-year strategy, especially in a down market where we may be able to transfer undervalued assets in kind,” Cordasco said, adding that 2021 “reinforced the potential of the estate exemption reverting to its pre-Trump levels in 2026, if not before. Estate and wealth transfer needs to be a main topic during mid-year planning."
He added that wealthy clients need to consider private placement deferred annuities and private placement life insurance. Family office-style structures also provide potential benefits to reclaim some of the deductions lost under the Tax Cuts and Jobs Act. “Since we have a potential narrow window under the Trump tax cuts, we need to manage how much income we’re deferring into the future. Acceleration and temperance are key to 2022,” Cordasco said.