The Advisor Institute: Coach's Corner
First and always

Practical messages intended to help you elevate the success of your practice.

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Eaton Vance disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Eaton Vance are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By David GordonDirector, Eaton Vance Advisor Institute

      During World War II, a reporter asked American General Omar Bradley, "Which comes first, general — the mission or the men?" Bradley famously answered, "Mission first, men always."

      Doing the right things routinely ("men always") can allow you to focus on more specific objectives when necessary ("mission first"). The After-Tax Advisor can take inspiration from "the soldiers' general" because improving a clients' tax outcomes requires both year-round attention and specific attention around calendar milestones.

      Tax-loss harvesting opportunities can occur at any time during the year. Below are some examples of time-sensitive decisions to discuss with your clients:

      Before year-end decisions

      • Do we estimate tax payments to offset underwithholding during the year to avoid penalties and interest?
      • Do we sell shares from incentive stock options (ISOs) exercised earlier in the year to avoid alternative minimum tax (AMT)?
      • Will realized capital gains require additional tax-loss harvesting to reduce net taxable gain?

      Early-in-the-New-Year decisions

      • Do we exercise ISOs, an AMT preference item, for more flexibility?
      • Should we make adjustments so withholding has more time to accumulate?

      Year-round decisions

      • Did a market drawdown, however short-lived, present loss-harvesting opportunities?
      • Can making quarterly estimated tax payments protect against underpayment penalties?
      • Did unexpected supplemental income events trigger insufficient withholding by employers?

      Bottom line: The After-Tax Advisor practices seasonal and year-round tax planning.