What is Tax Planning?

Tax planning is the process of working with a qualified tax planning specialist to reduce your overall tax liability. At 360 Financial, we know you’ve worked hard for your money and want to keep as much of it possible. Our tax planning experts can help you navigate complex tax laws and implement strategies to take advantage of available deductions and credits to potentially reduce the amount of taxes you owe.


At 360 Financial, we believe tax planning plays an essential role in financial planning and wealth management. We offer tax planning services geared toward both individuals and business owners. We know you’ve worked hard to earn your money. We leave no stone unturned to find ways to reduce your tax burden so you can keep more of it.

We can help you answer important tax planning questions such as:

• What are the most tax-advantageous investments for me?
• How can I take withdrawals in a tax-efficient and tax-smart manner.
• How can I leave a legacy for my children that is tax-advantageous for them?
• When should I take my Social Security?
• Are there opportunities to save via a Backdoor Roth IRA?
• Will I be able to make Roth Conversions in retirement to benefit from tax-free gains?


There are four basic types of tax planning:

  1. PERMISSIVE TAX PLANNING. Permissive tax planning refers to taking full legal advantage of available tax deductions and incentives to lower your taxes. Examples include taking Child Tax Credits and utilizing deductions from 401(k) contributions to reduce your taxable income.
  2. PURPOSIVE TAX PLANNING. Purposive tax planning involves strategically structuring your financial affairs in ways that lower your tax burden. An example is placing your assets in a trust to minimize estate taxes for your beneficiaries.
  3. SHORT-TERM TAX PLANNING. Short-term tax planning refers to taking steps at the end of the year to reduce tax liability. For example, a small business owner might purchase office equipment or new computers at the end of the fiscal year as a capital expense to take advantage of business expense deductions.
  4. LONG-TERM TAX PLANNING. This type of planning typically considers a taxpayer's overall financial picture and uses long term strategies to reduce their tax liability in the future. An example is investing in tax-advantaged retirement accounts such as a Roth IRA to take advantage of available and deductions.


  1. RETIREMENT ACCOUNT CONTRIBUTIONS. Maximizing your contributions to retirement accounts such as an employee 401(k) plan is one of the smartest things you can do financially. It reduces your taxable income in the short term, while helping you save for retirement. And since most employers offer a match, contributing as much as possible gets you free money for retirement.
  2. TAX CREDITS. Taking maximum advantage of tax credits like the Earned Income Credit and Child Tax Credit can lower your tax liability and sometimes even drop you into a lower tax bracket.
  3. TAX ADVANTAGED ACCOUNTS. Investing in tax-advantaged accounts like a Health Savings Plan or 529 College Savings Plans are two savvy ways to save money while reducing your taxable income.
  4. GIFTING. As parents, you and your spouse can make annual gifts to your children that reduce your taxable income. The money is then taxed as income at your kids’ lower tax rate.
  5. TRUSTS. Placing your money in trusts can reduce its exposure to tax, especially when it comes to estate and probate taxes.


  • Tax Loss Harvesting

    When you sell investments that have decreased in value, you can use the losses to offset capital gains on your investments that have grown. This can help reduce how much tax you owe.

  • Charitable Giving

    Giving donations to eligible charities lowers your taxable income while enabling you to do something helpful for a cause you care about.

  • Income Deferral

    Some employers offer programs that allow high-income earners make contributions to a deferred compensation plan that can reduce your taxable income in the current year while building your post-retirement savings.


Each of these strategies offer beneficial ways to reduce your taxable income. Tax planning is a long-term strategy that is generally part of a holistic wealth management plan that’s designed to lower your lifetime tax liability while maximizing your returns. Tax gain-loss harvesting is a specific strategy that involves selling assets that have lost value and using the losses to offset your taxable capital gains on assets that have increased in value.


Charitable giving can be used to offset your tax liability by donating to a registered non-profit organization with a 501(c)(3) designation. It’s one of the best tax saving strategies available because it reduces the amount of taxes you owe while letting you support a charity that’s close to your heart. That’s a win-win because most of us would rather see our money go to a cause we care about rather than the government.


Working with your 360 Financial advisor can benefit your tax planning in multiple ways. Since your advisor has a holistic view of your financial picture, they’re familiar with the unique nuances of your income, assets, investments and overall life goals. Our experienced advisors include tax specialists who understand the complexities of tax laws and can help implement tax-efficient strategies to reduce your tax burden now and in the future.


If you’re a small business owner or freelancer, 360 Financial can help with tax planning services designed to lower your personal and business income tax, while maximizing opportunities for tax-deferred investments.

Our services include solo 401(k)s, simplified employee retirement plans (SEP IRAs) and Roth IRAs if you’re a sole business owner with no employees. For businesses with employees that want to offer great employee retention benefits, we can help implement programs like Safe Harbor 401ks, cash balance plans and profit-sharing plans. All of these options can help reward your employees while qualifying as a deduction for the business. They also financially benefit you as an owner by increasing the amount of tax-deferred retirement contributions you can make.


  1. 401k OR IRA CONTRIBUTIONS. Contributing to a 401k or IRA reduces your taxable income through tax-deferred investments for your retirement.
  2. TAX CREDITS. Taking the maximum allowable deductions for tax credits such as the Earned Income Tax Credit, the Education Tax Credit and the Child Tax Credit can lower your tax liability.
  3. TRUSTS. Placing your assets in a trust that transfers them to your heirs when you die avoids probate and can lower the burden of estate taxes for your heirs.

Tax Planning Services Your Financial Advisor Should Provide

  • TAX PLANNING AND TAX RETURN REVIEWS. Your financial advisor should provide periodic tax planning reviews to make projections and identify ways to reduce your tax liability, including reviewing past tax returns, utilizing tax loss-gain harvesting and more.
  • TAX EFFICIENT INVESTMENTS. Good advisors offer you access to a diverse range of tax-efficient investment vehicles designed to grow your wealth. They also understand how to time withdrawals to minimize tax liability, especially when you’re preparing to retire.
  • ESTATE PLANNING. Financial advisors should offer guidance on estate planning, to help you to create a plan that reduces the tax burden on your beneficiaries when they inherit your assets.
  • TAX PREPARATION SERVICES. A good financial advisor either has qualifications and certifications to prepare returns, or they at least understand current tax laws and can collaborate with a CPA to reduce your tax burden.
  • CURRENT ADVICE. Tax planning laws and regulations change frequently. Good advisors stay on top of changing tax laws and keep their certifications up to date to ensure they are providing clients with the most current guidance possible.

Schedule a Call with a 360 Financial Advisor

If you need help navigating the complexities of tax planning, 360 Financial’s experienced team of professionals can help.
Schedule a no-obligation call with us to learn more, ask questions and decide if we’re a good fit for you

Schedule a 15-Minute Call


What are three basic tax planning strategies?

Three basic tax planning strategies include making contributions to an IRA and/or 401k, utilizing tax credits for deductions, and doing estate planning such as setting up wills and trusts. All of these are ways to reduce your tax liability.

What is the process of tax planning?

The process of tax planning involves analyzing all aspects of your financial situation to ensure all elements are structured so that you end up owing the least amount of taxes possible.

What are the important methods of tax planning?

The most important methods of tax planning include investment planning, estate planning and tax management strategies such utilizing standard and itemized tax deductions to reduce your tax liability.


Although we work with clients from all around the country, because we're based in Minnesota, we understand its unique tax laws and regulations. Our experienced team of tax planning experts can help you navigate Minnesota's tax codes and take steps to lower your tax liability. We specialize in guiding our clients through life's impactful financial events. Many of these can have tax planning implications that can be proactively addressed with the help of an experienced tax planning professional.

Schedule a Call with 360 Financial

We help many high-net-worth families in Minnesota navigate their tax and estate planning challenges.
Schedule a no-obligation call with us to see if we're a good fit for you.

Schedule a 15-Minute Call
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