Most tax conversations happen in the context of a single year.
How much income did you earn? What deductions do you have? How much do you owe?
Those questions are important. But they can also create a narrow view of tax planning.
Some of the most valuable tax strategies aren’t designed to reduce this year’s tax bill. They’re designed to create better outcomes over several years.
That’s a difficult mindset shift for many business owners. We naturally focus on what’s immediately in front of us. Yet some of the biggest opportunities I’ve seen came from decisions made years before the tax benefit was realized.
The One-Year Trap
It’s easy to think of tax planning as an annual exercise.
Tax season arrives, documents are gathered, returns are prepared, and attention shifts back to running the business.
The problem is that many planning opportunities don’t operate on a one-year timeline.
Some require multiple years of preparation. Others involve coordinating income, deductions, investments, or business decisions across several tax years.
In other words, the tax return is often the end of the story—not the beginning. Here are a few examples we have seen at Bland Garvey:
A Tax Strategy That Required Five Years
One client owned highly appreciated real estate inside a C Corporation.
The long-term goal was eventually to sell the property. The challenge was that a sale inside a C Corporation can create two layers of taxation: first at the corporate level and then again when proceeds are distributed to shareholders.
Because the client wasn’t planning an immediate sale, there was time to think strategically.
After evaluating the situation, the company converted to an S Corporation. That decision started a five-year holding period required under the tax rules before the full benefits of the strategy could be realized.
Had the client waited until the property was ready to sell, the opportunity would have been largely unavailable.
Instead, a decision made years earlier is expected to save hundreds of thousands of dollars when the transaction eventually occurs.
The lesson isn’t that every business should convert from a C Corporation to an S Corporation.
The lesson is that some opportunities only exist when you’re willing to think several years ahead.
Sometimes the Best Deduction Is Not This Year’s Deduction
Business owners are often encouraged to maximize deductions as quickly as possible.
In many cases, that’s appropriate.
But not always.
Take bonus depreciation as an example. Under certain circumstances, a business may be able to write off the full cost of an asset in the year it’s placed into service rather than spreading the deduction over several years.
That sounds like an obvious win.
But what if next year is expected to be significantly more profitable than this year? Or what if a major transaction is expected to generate a large taxable gain?
In some situations, the deduction may actually be more valuable in a future year.
Good tax planning isn’t always about accelerating benefits. Sometimes it’s about placing them where they’ll have the greatest impact.
Coordinating Across Multiple Years
The same concept applies outside of business operations.
Consider a client who expects an unusually large income event in a particular year.
Perhaps they sold a business interest, received a significant bonus, or experienced another one-time windfall.
Rather than making all of their charitable gifts immediately, they may choose to contribute to a donor-advised fund. The deduction is taken in the high-income year, while grants to charities can be distributed over time.
The charitable goals remain unchanged.
What changes is the coordination between when the deduction occurs and when the giving occurs.
That flexibility can create meaningful tax advantages while still supporting the causes that matter most.
Looking Beyond the Current Calendar
One of the most valuable questions a client can answer isn’t:
“What happened this year?” It’s: “What do you think might happen over the next few years?”
Maybe a business sale is being considered.
Maybe a real estate transaction is on the horizon.
Maybe income is expected to increase significantly.
Maybe retirement is approaching.
Even incomplete information can open the door to planning opportunities that would otherwise be missed.
The earlier those conversations happen, the more options tend to be available.
A Different Way to Think About Tax Planning
Tax planning isn’t just about minimizing taxes this year. It’s about understanding how decisions made today may affect taxes several years from now.
That perspective can feel counterintuitive, especially when tax returns are filed annually and tax deadlines arrive every spring.
But some of the most successful planning strategies share a common characteristic:
They weren’t rushed.
They were identified early, discussed thoughtfully, and implemented with enough time for the strategy to work as intended.
The Value of Looking Ahead
Most business owners are accustomed to planning for growth, staffing, investments, and operations years into the future.
Tax planning often benefits from the same approach.
The biggest opportunities aren’t always found in a last-minute deduction or a year-end scramble. More often, they’re found in recognizing an important decision early enough to create choices.
Because when it comes to taxes, the most valuable planning opportunities often begin long before they show up on a tax return.
If you’re considering a business transition, major investment, charitable planning strategy, or other significant financial event, Bland Garvey can help you evaluate your options and develop a proactive tax strategy.
Schedule a Discovery Meeting and explore what opportunities may exist before the next chapter begins.
Laura Zerger is Director with Bland Garvey, PC with experience in real estate, small business, not-for-profit organizations, oil and gas, and high-net-worth individuals. She enjoys travel, live music, and trying eclectic foods. She loves cycling, paddleboarding, and hiking with her partner Linden. She joined the Bland Garvey team in 2012.
The information provided is educational and general in nature and is not intended to be, nor should it be construed as, specific investment, tax, or legal advice. Individuals should seek advice from their wealth advisor or other advisors before undertaking actions in response to the matters discussed. No client or prospective should assume the above information serves as the receipt of, or substitute for, personalized individual advice.
This reflects our opinions, may contain forward-looking statements, and presents information that may change. Nothing contained in this communication may be relied upon as a guarantee, promise, assurance, or representation as to the future. Past performance does not guarantee future results. The charts and accompanying analysis are provided for illustrative purposes only. Our opinions may change over time. The appropriateness of a particular strategy will depend on an individual’s circumstances and objectives.
This is prepared using third party sources considered to be reliable; however, accuracy or completeness cannot be guaranteed. The information provided will not be updated any time after the date of publication.
