Tax Planning at Petrichor Wealth Management

How much does tax planning cost at Petrichor Wealth Management?

Tax planning is included as part of our comprehensive wealth management service, which typically ranges from 0.75% to 1.25% of assets under management annually depending on portfolio complexity. Unlike standalone tax planning services that charge hourly ($300-$500/hour) or project fees ($2,000-$5,000), our integrated approach means tax optimization happens continuously throughout the year as part of your overall financial strategy. There are no separate fees for Roth conversion analysis, tax-loss harvesting implementation, or coordination calls with your CPA.

How is tax planning different from tax preparation?

Tax preparation looks backward—it records what happened last year and files your return. Tax planning looks forward—it proactively structures your financial decisions to minimize taxes over your lifetime. At Petrichor, we handle the planning side: modeling Roth conversion opportunities, timing capital gains and losses, optimizing withdrawal strategies, coordinating charitable giving, and placing investments tax-efficiently across accounts. We then coordinate closely with your CPA who handles preparation and filing. Think of it as we design the tax strategy, your CPA executes the compliance.

What happens during a typical tax planning session?

Tax planning at Petrichor happens year-round, not just at one annual meeting. In Q4, we conduct comprehensive tax projection meetings where we review your current-year income, model your tax liability, and identify specific actions like Roth conversions, tax-loss harvesting, or charitable contributions to take before year-end. Throughout the year, we monitor your portfolio for tax-loss harvesting opportunities, coordinate required minimum distributions, and adjust strategies as tax laws or your situation changes. Before major financial decisions (home sales, business exits, inheritances), we model tax implications and present optimal approaches. Expect regular communication with both you and your tax preparer.

Who benefits most from professional tax planning?

Tax planning delivers the greatest value to high-income professionals and business owners ($200K+ household income), retirees managing multiple account types (401k, IRA, Roth, taxable accounts), individuals facing concentrated stock positions or large capital gains events, those with complex situations involving rental properties or business income, pre-retirees planning conversions before required minimum distributions begin, and anyone with charitable giving goals above $10,000 annually. If you're in the 24% federal tax bracket or higher, the tax savings typically far exceed the cost of planning.

What is a Roth conversion and should I do one?

A Roth conversion moves money from a traditional IRA or 401(k) to a Roth IRA. You pay taxes now at your current rate, but all future growth and withdrawals are tax-free. This strategy makes sense when you expect higher tax rates in retirement, during low-income years (early retirement, sabbatical, business loss), before required minimum distributions force larger withdrawals, or when you want to leave tax-free wealth to heirs. At Petrichor, we model your specific situation including current tax bracket, future income projections, Social Security and Medicare impacts (IRMAA), and estate goals. We identify your optimal conversion amount each year—often filling up lower tax brackets without pushing you into higher ones.

How does tax-loss harvesting work and what's the benefit?

Tax-loss harvesting involves selling investments at a loss to offset capital gains and up to $3,000 of ordinary income each year, with remaining losses carried forward indefinitely. We then immediately reinvest in similar (but not substantially identical) securities to maintain your portfolio allocation. The benefit compounds over time: a $10,000 harvested loss in the 24% bracket saves $2,400 in taxes, which remains invested and grows. Over decades, systematic harvesting can add 0.5-1.0% to annual after-tax returns. We monitor your taxable accounts continuously and harvest opportunistically during market volatility, not just at year-end.

Do you prepare tax returns or do I still need my CPA?

We do not prepare or file tax returns—that remains with your CPA or tax preparer. Our role is strategic tax planning and coordination. We work collaboratively with your tax professional: we provide detailed records of investment transactions, model tax scenarios for major decisions, identify planning opportunities throughout the year, and communicate directly with your CPA (with your permission) to ensure everyone is aligned. Many clients find this division of labor ideal: Petrichor handles proactive wealth and tax strategy, while their CPA focuses on compliance, preparation, and specialized areas like business or estate tax returns.

What tax strategies do you use for charitable giving?

We implement multiple charitable giving strategies depending on your goals and tax situation: donating appreciated securities directly to charities (avoiding capital gains tax while getting full fair-market deduction), establishing donor-advised funds to bunch multiple years of deductions into high-income years, qualified charitable distributions (QCDs) for clients 70½+ that satisfy required minimum distributions without increasing taxable income, charitable remainder trusts for large appreciated assets, and timing of gifts to maximize itemized deductions. For clients giving $10,000+ annually, these strategies often double the tax benefit compared to simply writing checks.