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However, this strategy may not be as advantageous in the face of potential future tax rate increases and uncertainties. Here are some key considerations:

📌 Uncertain tax rates: Tax rates are currently relatively low due to the Tax Cuts and Jobs Act of 2017, but if Congress doesn't extend existing rules, tax rates may increase starting in 2026.

📌 Life events: Changes in personal circumstances, such as the death of a spouse or divorce, can lead to higher tax liabilities in retirement. Planning for these possibilities is essential.

📌 Capital gains: Not selling appreciated assets to limit your tax liability in a given year can lead to an over-concentration in a single stock. Consider settling a tax liability at a reasonable rate rather than a potentially higher future rate.

📌 Tax location: Match investment assets generating ordinary income with accounts taxed as ordinary income and consider holding capital-gain-oriented assets in accounts with favorable capital gains tax rates.

📌 Roth IRA advantage: Roth IRAs provide tax-free growth and withdrawals, making them suitable for assets with high, long-term growth potential.

If you want to minimize the dollars you owe Uncle Sam, it’s crucial to focus on limiting your long-term tax liability, versus only minimizing taxes in the current year. Planning for future tax rates, considering life events and optimizing the tax treatment of your investments is key.