Blog Article

Tax Planning Tips and the Role of an Enrolled Agent

Business women having a work lunch in a café, exchanging ideas and discussing their projects with a client. Young business team using a laptop as they sit around a coffee table.
Scott Christensen

By Scott Christensen, Wealth Advisor, CFP®, EA
Published On 11/14/2023

I recently received a call concerning our article Think Twice Before Moving Into Your Rental To Avoid Taxes. The caller planned to move back into their long-time rental property for the next two years in hopes of significantly reducing their tax due upon selling the property. Sounds great on paper! However, as with many provisions in the tax law, it’s not that easy. Given the information that they rented it out for most of the time they owned the property, I informed them they would not be able to exclude all but a slight portion of the gain if they moved back into their rental property for two years before selling it. This came as a big surprise and, of course, a big disappointment as well. After working together to determine their estimated tax due, they ultimately decided the hassle of moving back into their rental property before selling it was not worth it.

Phone calls like this one have led me to reflect on how I can best be of service in my profession. Complicated tax situations like the one described often cause frustration, confusion, and poor decisions when not completely understood. Conversely, I’ve seen decisions confidently reversed upon understanding how a tax law or provision works and how it applies to the situation. After many of these experiences, I became determined to increase my tax expertise. To best accomplish this, I decided to pursue becoming an Enrolled Agent.

What Is an Enrolled Agent?

Let me explain who Enrolled Agents are, what they do, and why this is important. An Enrolled Agent (EA) is a tax expert who specializes in tax planning, tax preparation, and helping individuals and businesses with tax-related issues. The Internal Revenue Service (IRS) awards Enrolled Agent status as its highest credential.
Among other things, Enrolled Agents perform:

  1. Tax Planning: EAs can provide tax planning advice to help clients make informed decisions about their finances, investments, and business operations. They can suggest strategies to reduce tax liabilities.
  2. Tax Problem Resolution: If a taxpayer encounters tax problems, such as owing back taxes, EAs can help provide solutions to resolve these issues.
  3. Tax Compliance: EAs help clients comply with tax laws and regulations. They stay current with tax code changes and advise clients on how to meet their tax obligations.

Becoming an Enrolled Agent requires individuals to pass a rigorous three-part examination covering federal tax topics and ethics. They must also adhere to strict ethical standards and undergo continuing education to maintain their EA status. Since recently becoming an Enrolled Agent, I have had opportunities to be of service concerning confusing tax topics where common answers such as “it depends” and “maybe” fuel the frustration and lengthen the quest to find a resolution. I found that I receive more satisfaction in giving concise answers to complicated tax questions than I do with just about any other part of my job.

Year End Tax Tips

With the end of the year quickly approaching, let me leave you with some tax tips to consider:

  1. Review your income
    ● Determine your expected annual income
    ● Consider strategies to defer or accelerate income depending on your current and expected tax bracket/financial situation.
  2. Maximize your retirement contributions
    ● Contribute the maximum allowable to your 401(k), 403(b), IRA or Roth IRA, or other retirement accounts
    ● Consider catch-up contributions if you are age 50 or older
    ● If you are over the income limits to contribute directly to an IRA or Roth IRA, consider making back-door Roth IRA contributions
  3. Charitable giving
    ● Be sure to give by the end of the year to claim a deduction for this year
    ● Explore a donor-advised fund or qualified charitable distributions (QCDs) for tax-efficient giving
  4. Harvest losses
    ● Consider selling underperforming assets in your non-retirement accounts to offset capital gains
  5. Evaluate tax-efficient investments
    ● Hold your investments for more than one year to qualify for lower capital gains tax rates
    ● Move tax-efficient investments into a taxable investment account and the least tax-efficient investments into a tax-advantaged retirement account
  6. Review tax credits and deductions
    ● Check for tax credits and deductions you may be eligible for, such as education credits, electric vehicle tax credits, child tax credits, or home mortgage interest deduction
  7. Health insurance
    ● Consider maximizing your contributions to Health Savings Accounts (HSAs) if eligible
  8. Consult a tax professional
    ● A tax professional or financial advisor can give personalized advice based on your specific financial situation

Looking for more end-of-year tax tips? Check out our previous years’ blog posts:
2020 Year End Tax Moves

Year End Tax Planning

Year End Tax Planning Checklist

If you have questions about your situation, please reach out, and we can help ensure you’re not missing any opportunities to optimize your portfolio and tax situation.



Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable; however, Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal, or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always, please remember investing involves risk and possible loss of principal capital, and past performance does not guarantee future returns; please seek advice from a licensed professional.

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Scott Christensen

By Scott Christensen, Wealth Advisor, CFP®, EA

Scott’s interest in finance began at a young age, with a fascination that his money could make money! He quickly learned that when money and finances are properly managed, it opens life up to possibility. He’s now privileged to provide precise, strategic advice to families, helping them improve their financial lives and relationships with money.

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