There is no perfect tax management strategy. What works for you might not work for someone else. Yet, there are still some key areas to understand that can benefit you this tax season.
There are many new tax laws in place, but a few important ones to be aware of include:
Roth conversions aren’t the right fit for everyone, but they can offer meaningful benefits for certain investors. By moving funds from a traditional IRA into a Roth IRA—and paying the taxes upfront—you position all future growth and withdrawals to be tax free, provided key rules are met.1
Roth IRAs also avoid required minimum distributions, which can be useful for estate planning.
A few things to keep in mind:
If you spend a lot on health care over the year, you may be able to deduct eligible expenses on your taxes. For 2025, you can deduct medical, dental, and other health related expenses that exceed 7.5% of your Adjusted Gross Income (AGI).
Additionally, two taxes may affect high income taxpayers:
The Additional Medicare Tax
The Net Investment Income Tax (NIIT)
Some high earning investors must pay an additional 3.8% tax on investment income. You may qualify if your modified AGI is above:
Because these rules are complex, working with a tax professional is always a good idea.
Tax season is also a great time to take inventory of your potential retirement income sources and consider how changes might impact your taxable income.
In some cases, you may be able to:
Creating a strategy that minimizes taxes—especially if you’re currently in a high tax bracket—could help you take home more money in retirement.
Understanding how to do this in a way that best supports your long term goals can be confusing, so it’s always wise to consult both a financial and tax professional.
Asset location attempts to manage tax liabilities by taking advantage of the different tax treatments that certain investments offer. This strategy does not guarantee positive results and involves the risk of losing principal.
Some investors aim to maximize after tax returns by placing certain assets in tax deferred accounts and others in taxable accounts. The right approach depends heavily on your age, income needs, and risk tolerance.
Each year, you’re allowed to gift a certain amount tax free without affecting your lifetime gift exemption. In 2025, you can gift up to $19,000 per person without filing a gift tax return. Recipients never owe taxes on gifts.
Even if you exceed this amount, you still won’t owe federal gift tax unless you reach the lifetime gift exclusion of $13.99 million in 2025. Direct payments toward qualified medical, dental, or tuition expenses do not count against your annual or lifetime exclusion.
Treasury securities2 are considered low risk investments and can help diversify your portfolio. They generally offer lower interest rates than other taxable fixed income options, but many investors choose them because they’re backed by the full faith and credit of the U.S. government.
If held to maturity, Treasuries offer a fixed return and principal value; however, their market value can fluctuate. Interest is typically exempt from state and local taxes, though capital gains tax may apply if sold before maturity.3
Municipal bonds4 can help create tax free income by allowing you to lend money to local, county, state, or other government agencies. In return, the issuer promises to pay you interest and return your principal at a specified date.
Keep in mind that municipal bonds are subject to availability, market conditions, and interest rate risk.
A financial professional can help you decide whether Treasuries, municipals, or a combination may be appropriate for your needs and goals.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual
While this is only an overview of key tax considerations, we always recommend meeting with a tax professional to review your specific financial situation. You can watch the full webinar on this topic or connect with an Alliant Retirement and Investment Services financial consultant today.
1. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
2. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
3. Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
4. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk.
Talk to an Alliant Retirement and Investment Services financial consultant
Get even more personal finance info, tips and tricks delivered right to your inbox each month.
Thanks for subscribing to Alliant's Money Mentor newsletter! You will now receive personal finance tips in your email inbox each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.
You are leaving an Alliant Credit Union website and are about to enter a website operated by a third-party, independent from Alliant Credit Union. Alliant Credit Union does not manage the operation or content of the website you are about to enter. Alliant Credit Union is not responsible for the content and does not provide any products or services at this third-party website. The privacy and security policies of the site may differ from those of Alliant Credit Union.
