What This 2024 Tax Season Working as an Enrolled Agent Taught Me about Proactive Wealth and Tax Management
Alongside my work as a financial advisor, I also work part time at an accounting firm during tax season, where I prepare and review tax returns. As an Enrolled Agent (EA) with the IRS, I hold a federal license that allows me to represent taxpayers before the IRS on tax matters, much like a CPA or tax attorney. This dual perspective gives me firsthand insight into the tax challenges people face and allows me to bring practical, real-world solutions into the financial planning strategies we craft for our clients.
As I come up for air after the frenzy of April, I’ve been reflecting on the patterns I saw again and again this season. There are some powerful lessons I want to share with you — insights drawn directly from the front lines of tax preparation, designed to help anyone looking to take control of their wealth with greater confidence and smarter strategy.
Let’s dive into what 2024 taught me about tax management, philanthropy, healthcare planning, and protecting your financial future.
Taxable Investment Accounts: Great Returns, Terrible Timing
One of the most common issues I saw while reviewing tax returns was the inefficient realization of taxable gains. Sometimes you need to generate cash from your taxable investment accounts but there are smart ways to do it that minimize the tax hit.
Too many people work with advisors who are NOT tax-smart. Making money is great, but when you sell investments without considering when and how you sell, you're essentially throwing a tax party and the IRS is the guest of honor.
Those who cashed out appreciated securities without a plan often triggered short-term capital gains, which are taxed at ordinary income rates — sometimes as high as 37%. With smart strategies like tax-loss harvesting, timing sales for long-term capital gain treatment, and strategic gifting of appreciated securities, we could have significantly reduced those tax bills.
If you’re investing, you need a tax strategy as much as an investment strategy. Smart wealth management includes proactive tax efficiency.
Smart Tip: Review your investment accounts regularly with a tax-savvy advisor to ensure every buy, sell, or hold decision is made with both growth and tax-efficiency in mind.
Philanthropy: Good Intentions, Missed Opportunities
I saw many returns where individuals made small charitable donations but still ended up taking only the standard deduction, meaning their giving didn’t reduce their tax bill. So many people are unaware of a strategy called ‘gift-bunching,’ where consolidating donations into one tax year maximizes deductions.
As wealth advisors, we often recommend Donor Advised Funds (DAFs) to our clients. A DAF allows you to bunch your charitable giving into a single tax year, take the full deduction, and then thoughtfully distribute grants to your favorite charities over time. DAFs also create a beautiful legacy of giving with flexibility and control.
Smart Tip: Philanthropy isn’t just about generosity. It’s about proactively managing the tax and wealth impact of your giving. By planning your giving with a tax-smart advisor, you can amplify your impact and have it positively impact your tax return.
Health: Your Wealth's Silent Partner
This tax season reminded me how critical it is to view health as part of your wealth strategy. I saw high medical expenses on many returns and while some expenses were deductible (after exceeding the 7.5% AGI threshold), most were simply out-of-pocket costs with no tax benefit.
Good health habits today (think preventive care, fitness, mental wellness) aren’t just about living well; they’re a financial safeguard. Investing in your well-being now can reduce future healthcare costs that even the best insurance won’t cover.
Financial Wellness Tip: Prioritize your health just like you prioritize your portfolio.
Long-Term Care Costs: Plan Early, Sleep Better
Long-term care costs were a recurring theme this season, especially for women who statistically live longer and are more likely to need long-term care support. Medicare doesn’t cover most of these costs, and without a plan, assets can be wiped out fast.
By using long-term care insurance (LTCI), we can add a critical layer of protection. Premiums are often deductible within certain limits based on age, and more importantly, LTCI preserves your independence and safeguards your estate for the next generation.
Power Move for 2025: Explore long-term care insurance options early, when premiums are lower and your health is stronger.
Proactive Wealth and Tax Management Beats Reactive Stress — Every Time
If this tax season taught me anything, it’s that success isn’t accidental — it’s intentional. You don’t just build wealth; you build the strategy that lets you keep it, grow it, and enjoy it.
Action Step: Schedule your mid-year tax and wealth check-in today. Don’t wait until next April to find out what you could have fixed this year.
Let’s create your custom strategy.
Not a client but ready to move from reactive to proactive? Schedule your complimentary consultation today because your wealth deserves to be as smart and strong as you are.