Tax-Aware
Financial Planning
in the Greater Houston Area
Taxes are a certainty. They are also one of the highest costs for high earners. Proper tax planning takes a deliberate approach towards managing that cost.
We help families in the greater Houston area evaluate their tax situation and identify opportunities to reduce or defer their tax liability, both this year and over the course of their lifetimes.
At M.C. Byrd, we help individuals, families, business owners, and professionals in the Greater Houston area reduce unnecessary tax exposure through tax-aware financial planning strategies designed to work alongside their broader financial goals.
What Is Tax-Aware Planning?
Taxes run throughout your financial life. Your investment allocation, retirement contributions, and estate planning all involve tax considerations.
If you don't take those components into account, you risk leaving money on the table.
Inherited
IRA Planning
The SECURE Act, passed in 2019, required that those inheriting an IRA distribute the full balance within a 10-year period.
This can result in high earners being forced to take on additional income, and even throw them into a new tax bracket.
We help clients offset this additional income in ways that benefit their long-term financial plan while reducing this year’s taxable income.
Managing Appreciated Stock Positions
Are you holding a large appreciated stock position that would incur significant capital gains taxes if you were to liquidate?
Many of our clients have found themselves in the same situation.
Long-short or covered call strategies that enable you to diversify your portfolio without triggering a major taxable event.
Planning Around
Major Capital
Gains Events
Looking to sell your business or a valuable piece of land? Long-short strategies can significantly reduce your tax exposure.
Strategies Designed to Reduce Tax Exposure
When evaluating strategies to reduce your tax exposure, we start with your tax return. Once we have a picture of your potential tax liability, we present strategies like:
Covered Call
Strategies
Often, new clients come to us with a large stock position. These clients may have a sentimental attachment to the stock or wish to retain it to avoid a significant capital gains bill.
Covered call strategies generate income or losses that can offset capital gains in the underlying position or in other parts of the portfolio.
Retirement
Contribution
Strategies
Pre-tax retirement contributions reduce your taxable income each year.
We help clients use these contributions as a strategic offset when they’re forced to take income elsewhere.
Tax-Aware
Distribution Planning
Do you know how much room you have before you hit the ceiling of your current tax bracket? What about during retirement?
Our tax analysis can help you identify those ceilings and build a strategy to manage your lifetime tax liability.
Charitable Giving Strategies
Do you have charitable inclinations? Make those part of your tax strategy.
We help clients evaluate Qualified Charitable Distributions (QCDs) and Donor-Advised Funds (DAFs) so that your giving is tax-efficient.
Roth Conversion Analysis
Roth conversions get a lot of press these days, and for a good reason. Over the last 30-40 years, pre-tax retirement accounts have become the primary destination for most Americans’ savings.
Many retirees end up paying more in taxes than they expect. Roth conversions in low-income years can help you manage your long-term tax liability.
Tax Planning For Business Owners and Families
Everyone’s tax situation is unique.
Here are a few common situations we run into:
Business
Owners
If you are an entrepreneur, your complex financial picture contains opportunities, such as:
• Safe Harbor 401(k) plans.
• Cash balance plans.
• Non-qualified plans.
Business owners like you can sometimes defer income of six figures annually.
Physicians and
High-Income
Professionals
If you are a physician or a high-income professional, you face a different set of opportunities.
We often focus on:
• Compensation and benefits analysis.
• Managing tax liability through investments and pre-tax contributions.
• Coordinating tax and estate planning
Pre-Retirees
and Retirees
If you are approaching retirement, your tax situation is about to change.
We evaluate the accounts you will take income from, and help you plan around Social Security and Required Minimum Distributions.
Coordinating With CPAs
and Tax Professionals
We use specialized tax-planning software to help identify opportunities and model strategies.
When it comes time to prepare and file, we coordinate with your CPA.
Working Alongside Your CPA
We coordinate with our clients’ CPAs, typically on situations involving business ownership, multiple entities, or large, one-time capital gains events.
Referrals to Trusted Professionals
Not working with a CPA currently? We’d be happy to introduce you to professionals our clients have had positive experiences working with.
Frequently Asked Questions
Your personal financial decisions have tax consequences. When we build your financial plan, we make deliberate decisions to optimize your tax efficiency, both this year and over your lifetime.
Every situation is different, and we can’t guarantee we’ll reduce your retirement taxes. That said, we’re confident that evaluating your current retirement contributions, distribution strategy, and suitability for a Roth conversion can uncover significant opportunities for the right individuals.
A covered call strategy sells call options on an existing position, and over time generates income or losses based on how the options perform. We work with reputable third-party vendors in order to execute these complex strategies. This can help you manage your capital gains liability in appreciated positions.
No. We provide tax planning guidance and coordinate with CPAs. When it comes time to prepare and file, we recommend working with an accountant or tax professional.