Here’s how consultants help clients reduce their 2022 tax bill

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Roth IRA conversion weighting

“We regularly discuss transforming Roth for retired clients who have not yet started using Social Security services because their incomes are temporarily low,” said Matt Stevens, Certified Financial Planner at AdvicePoint in Wilmington, North Carolina. “Job change could also provide a unique opportunity for Roth’s transformation.”

One of his clients lost her job at the end of 2021 and did not open a new one until April, leaving her income much lower than usual in 2022 and her portfolio shrinking. “By completing the Roth transformation this year, she can turn a dire situation into huge tax savings,” he said.

Consider “Tax Collection”

For some investors, this is a chance to make a profit or diversify their taxable portfolio without triggering an invoice, explained Edward Yastrem, CFP and director of financial planning at Heritage Financial Services in Westwood, Massachusetts.

With a retired client below the income threshold, he said, he was able to reduce their large single-share position, achieving their goals of “providing liquidity and reducing concentrated risk.”

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