At EmVision Capital Advisors, we believe that managing wealth isn’t just about investment performance, it’s also about minimizing what you lose to taxes. For many households, particularly high-income households, taxes are the single largest expense each year. Efficient tax planning is a vital part of long-term financial success.

Why Taxes Matter in Wealth Management

Studies show that equity investors in the top tax brackets lose an average of 2.2% annually to taxes³. Over time, this loss can be staggering. For example, a portfolio invested in the S&P 500 from 1988 to 2022 lost nearly $6.8 million to taxes, equal to 18.3% of its pre-tax value⁴.

Without tax-aware strategies in place, investors risk eroding their wealth and limiting their future spending power in retirement.

Ongoing Tax Management

We view tax planning as an ongoing discipline, not a one-time event. Our team incorporates tax-aware strategies into each stage of portfolio management:

• Analyzing existing assets – Reviewing cost basis and unrealized gains before making changes.

• Developing a tax budget – Proactively planning for potential liabilities.

• Designing multi-stage transition plans – Spreading out tax impacts instead of realizing them all at once.

• Tax-loss harvesting – Selling securities at a loss to offset gains and reduce ordinary income.

Internal research has shown that tax-loss harvesting added an average of 1.04% in annual returns over a three-year period for qualifying accounts⁴.

Tax Transition Strategies

Many high-net-worth investors hold securities with a low cost basis. Selling all at once could trigger a large tax bill, which is why we work to transition assets gradually. Market volatility can be an opportunity that allows us to move toward a more efficient portfolio while helping minimize the tax impact.

Capital Gains Management

Capital gains can surprise investors, even in down markets. By using separately managed accounts (SMAs), gains and losses are realized only at the individual account level. Combined with tax-loss harvesting, this flexibility can help reduce overall tax liability.

Municipal Bond Strategies

For clients living in high-tax states, municipal bonds can be an effective way to generate tax-free income. State-specific strategies, such as those for California, New Jersey, New York, and Pennsylvania, can provide additional benefits.

Asset Location

Placing the right investments in the right accounts is another powerful way to manage taxes:

• Qualified accounts (IRAs, 401(k)s): Often suited for taxable bonds and tactical strategies.

• Non-qualified accounts (brokerage): Better suited for municipal bonds and strategic portfolios.

When coordinated across household accounts, asset location planning can further enhance after-tax results.

Thoughtful Strategies Goes a Long Way

Taxes are inevitable, but with thoughtful strategies, their impact can be reduced. By integrating approaches such as tax-loss harvesting, capital gains management, municipal bonds, and smart asset location, we help clients keep more of their wealth working for them.

At EmVision, we believe tax planning isn’t just about saving money, it’s about building long-term confidence and freedom in retirement.

Questions? Reach out today. We're here to help.

Johnathon Opet, CFP® is a financial advisor located at EmVision Capital Advisors, 251 W. Garfield Rd. ​Suite 155 Aurora, OH 44202. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at (330) 954-3770 or at info@emvisioncapital.com.

Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Advisor. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network®.

Sources

1. U.S. Department of Labor Statistics, Expenditure Survey, 2015 AIA

2. Investment Company Institute. Trends in the Expense and Fees of Funds, 2018 (March 2019)

3. Peterson, J.D., Pietranico, P.A., Riepe, M.W., Xu, F. Explaining After-Tax Mutual Fund Performance. Financial Analysts Journal, Vol. 58, No. 1 (Jan/Feb 2002)

4. Clark Capital internal research, 2015–2018 study on taxable accounts with tax-loss harvesting