Comprehensive Tax Planning Guide for Financial Advisors: Part 2

With taxes top of mind during tax season, financial advisors have a prime opportunity to offer meaningful guidance. In this second installment of LPL Financial’s tax planning series, we highlight proactive, high‑impact tax strategies designed to help you stand out and strengthen client relationships.

Four Key Tax Planning Strategies

Here are four proactive tax planning strategies that can help deepen trust and strengthen client relationships. These approaches not only address immediate tax considerations but also open the door to more holistic, year‑round planning conversations. By showing clients how tax decisions fit into their broader financial picture, you position yourself as a proactive partner in their long‑term success.

1. Turn Retirement Contributions into a Planning Conversation

Rather than simply reminding clients to max out their IRA or 401(k), use tax season to bring the numbers to life. Walk them through scenarios that show the potential tax savings of increasing contributions compared to where they are today.

For high earners nearing or exceeding income limits, this is also a good moment to introduce possibilities like backdoor Roth IRAs or mega backdoor Roth strategies. Framed the right way, these conversations feel less like a checklist and more like part of a longer‑term plan that evolves with the client.

2. Help Surface Deductions and Credits They May Have Missed

Clients are often most focused on lowering their tax bill this time of year, and that’s where you can step in with valuable guidance. Help them think through deductions or credits that sometimes get overlooked, such as home office expenses, education credits, energy‑efficient home upgrades, or qualifying medical costs.

For self‑employed clients or small-business owners, you can also flag opportunities around qualified business income deductions. Position yourself as the connector, making sure their CPA has the full financial picture needed to identify every relevant opportunity.

3. Bring Capital Gains Planning into Focus

Tax season is a natural checkpoint for clients with taxable investment accounts. Review realized gains and losses together and talk through strategies like tax‑loss harvesting where appropriate.

If a client is considering a major asset sale, this is also a good time to explain how timing affects short-term versus long‑term capital gains. For high‑net‑worth clients subject to the net investment income tax, you can explore ways to manage modified adjusted gross income and potentially reduce added tax exposure.

4. Revisit Charitable Giving with a Tax‑Smart Lens

Many clients care deeply about giving back and may not realize how tax‑efficient their giving can be. During tax season, you can introduce or revisit strategies like donor‑advised funds, qualified charitable distributions from IRAs (for clients age 70½ and older), or bunching contributions to exceed the standard deduction.

For clients with appreciated securities, walk them through the benefits of donating stock — avoiding capital gains tax while still receiving a charitable deduction at fair market value. These conversations often resonate on both a personal and financial level.

Tax Planning Is a Year-Round Opportunity, Not Just a Filing Season Task

While tax season provides a natural opportunity for tax-focused conversations, the most effective tax planning strategies for high earners and other clients unfold throughout the year. Here's how to integrate tax planning into your year-round wealth management and tax strategy discussions:

Proactive Check-Ins Tied to Life Events and Market Shifts

• Timing: Quarterly or semi-annually and immediately following significant life or market events
• Trigger events: Marriage or divorce, inheritance, job change or promotion, business sale, receipt of equity compensation, or significant market volatility
• Advisor action:
  • Schedule proactive reviews to assess how these events impact tax planning. For example, a client receiving a large bonus or stock options may benefit from increased retirement contributions, charitable giving, or Roth conversions in the same tax year. A major market downturn may present tax-loss harvesting opportunities or a favorable time for Roth conversions at lower account balances.

Tax-Efficient Investment Decisions Throughout the Year

• Timing: Ongoing portfolio management and rebalancing activities
• Trigger events: Portfolio rebalancing, new investments, withdrawals, or changes in income
• Advisor action:
  • Consider asset location strategies: placing tax-inefficient investments like bonds or REITs in tax-advantaged accounts while keeping tax-efficient equities in taxable accounts.
  • When rebalancing, minimize tax drag by harvesting losses, using new contributions strategically, or timing sales to qualify for long-term capital gains treatment.
  • For high-income clients, monitor adjusted gross income throughout the year to manage exposure to additional Medicare taxes and other income-based thresholds.

Estate and Long-Term Planning to Manage Future Tax Liabilities

• Timing: Annual reviews with heightened focus when approaching retirement or during estate planning updates
• Trigger events: Approaching retirement, significant wealth accumulation, changes in estate tax exemptions, or family planning discussions
• Advisor action:
  • Discuss strategies like Roth conversion ladders to minimize required minimum distributions in retirement.
  • Review estate planning structures to leverage step-up in basis for beneficiaries.

For high-net-worth clients, coordinate with estate attorneys on gifting strategies that utilize annual exclusions and lifetime exemptions before potential changes to tax law. 

Don’t miss the two free resources that pair with this guide. Download our advisor talking points for confident conversations, and a client checklist to inspire timely, proactive check‑ins.

How LPL Helps Advisors Deliver Tax-Aware Planning

Providing truly high‑value, tax‑aware planning requires the right support behind you. LPL Financial equips advisors with the systems, resources, and partnerships needed to confidently weave tax awareness into everyday planning conversations while staying within compliance boundaries.

Because tax discussions can sometimes feel unclear — especially when distinguishing general guidance from licensed advice — LPL’s compliance team helps remove the guesswork by offering clear direction on what you can discuss and when additional licensing may be required.

You also gain access to compliance‑approved language, templates, and disclaimers tailored for client conversations. With these guardrails in place, you can stay focused on what matters most: delivering meaningful value to your clients while feeling fully supported and compliant each step of the way.