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Written by: Erik Flegal
Do You Want To Pay Less Tax?
The expanding holistic financial planning movement along with the growing threat of rising taxes in retirement is breaking the traditional “You Shall Not Pass!” demarcation between financial advisor advice and accountant/CPA tax services. In fact, the deeper financial knowledge of increasingly complex investment options and alternatives, along with advanced high-net-worth insurance products and strategies puts the advisor in a better position to work with the client’s tax professional and lead overall financial strategy.
To help explore how advisors are integrating, or even in some cases, leading with tax planning and mitigation services, we are happy to publish this first-in-a-series article from our guest author, Erik Flegal, the Founder and CEO of Fortune Tax Alliance LLC, a subsidiary and affiliate of Family Fortune Financial – a Mount Pleasant, South Carolina-based financial advisory firm focusing on helping their clients avoid overpaying taxes, hidden fees, and commissions. In this article he discusses and illustrates how he presents his tax mitigation services and how he establishes a “win-win”, noninvasive tax alliance with the client’s other advisors.
It is unlikely anyone would answer “No” to the question above. Attend an upscale event and it is likely that half of the attendees, at some point, are talking about taxes. More specifically, how can they pay less tax.
Let us set the table – there are generally three places you can give your money - family, charity, or the IRS. The goal of tax planning should be to make sure you give most of it to the first two. The added headwind is that taxes are likely going up. In 2026, all the tax tiers will revert to the higher 2017 numbers unless the government can agree to extend the lower levels. An American with an annual income of $500,000 or more is staring down the barrel of 1–5% additional annual tax.
And where most solutions revolve around a product, not everyone is a nail to the product hammer. We offer a new collaborative process that emphasizes tax planning and mitigation, and our firm can do just that. There are a few ways to think about reducing tax:
- Defer the tax. This references things like Opportunity Zone investments or investing in 401(k) plans. There are other examples, but the main thrust is $1 today is worth more than $1 tomorrow. Deferral is a powerful tool to “kick the tax can” down the road.
- Eliminate the tax. The basic version of this is harvesting losses in your stock portfolios. The losses offset the gains. More sophisticated versions create offsets to active or passive income, but the goal is the same – generate a way to offset income or gains into the portfolio.
In some instances, people try to spend their way out of paying taxes. They purchase cars, real estate, new investments, or equipment. But this points back to the product-based approach. So then, how can we create something truly bespoke?
- First, the client must be curious.
- Second, they need to be collaborative.
- Third, they need to be open to a little complexity.
If clients are willing to spend a little time understanding a strategy, the numbers alone can compel action. If people do not have those three basic attributes, they would not be a good fit for this process.
Our clients are hungry to get an edge and open to learning. Understandably, a successful founder who grew a business with a long-time team of advisors might be reluctant to create tension or rivalries by adding a new player.
But our process avoids that possibility. Here is how:
- Most importantly, our approach and process are conflict free. Reason being, a client’s current advisors all take care of different aspects of a client’s finances, but none of them are saying, “Our sole focus is tax mitigation.”
- Because our focus is on tax planning and tax mitigation, we are additive to the other disciplines on the team.
- The savings we intend to generate produce additional assets to manage, curate and grow for the other professionals on the team.
- This noninvasive dynamic creates what might be called “an advisory tax alliance.”
- The goal is that everybody wins, not just the client, but all advisors involved in the client’s wealth management and estate planning.
In upcoming articles, we will go into more detail about our collaborative, noninvasive process. But if, with this piece, we have piqued your interest and you want to learn more now, you can engage knowing our client assurance:
We work hard to inform and let the numbers articulate the value.