5 tax planning considerations for individuals, families and business owners
5 individual tax planning priorities to discuss with your tax advisor
RSM’s annual individual tax planning guide highlights five topics that are surfacing repeatedly in conversations with private companies and high-net-worth business owners:
- Estate planning for business owners
- Business growth
- Tax-aware investing
- Charitable giving
- Qualified opportunity zones
For each topic, our guide outlines trends our client service professionals are seeing, planning gaps to beware of and key questions to ask your advisor.
Understanding the fundamentals of individual tax planning
Individual tax planning can help business owners understand the tax consequences of major financial decisions before they act. That means considering taxes throughout the year as they make business plans, manage investments and plan for transferring wealth.
Individual tax planning considers how choices about income, deductions and investments may affect your tax position. For business owners, those choices often reach beyond a personal tax return. Business decisions can affect personal cash flow and investments, while plans for transferring wealth may depend on how and when ownership interests change hands.
When might income be recognized? Which deductions may be available? How might taxes affect an investment’s return? Addressing these questions early can help you and your tax advisor understand the options before setting a course.
What to ask:
If my estate plan were implemented today, how much wealth would ultimately go to my heirs?
What we're seeing:
Clients are revisiting their estate plans to see whether the plans still align with family circumstances, business ownership structures and wealth levels.
Common planning gap:
Focusing on who receives assets without evaluating the tax impact on those assets
Many business owners have invested significant time building wealth but have spent less time evaluating how that wealth will ultimately transfer to future generations.
A current estate plan is valuable only if it still reflects a family's goals, business ownership structure and wealth profile. Business owners benefit from understanding not only who inherits assets, but also the tax consequences, liquidity needs and long-term implications for family-held businesses.
How much cash goes to your heirs, and how much goes to the government? Reviewing these issues before a transition event provides more options than reacting afterward.
Under the One Big Beautiful Bill Act (OBBBA), the estate, gift and generation-skipping transfer (GST) tax exemptions were permanently set at $15 million per individual (or $30 million for married couples) starting in 2026, with inflation adjustments scheduled for future years. These changes provide certainty for long-term wealth transfer planning, making this a useful time to revisit your assumptions about your estate plan and see whether new planning opportunities may be available.
Prepare for the conversation with your tax advisor
What to have handy
Help your tax advisor understand your current estate plan, ownership interests and wealth-transfer goals. Useful information may include:
- Current estate-planning documents and a personal balance sheet
- Business ownership details, valuations and succession plans
- Information about significant gifts, trusts and expected liquidity needs
What the conversation can uncover: How much wealth may ultimately pass to your heirs after accounting for taxes, liquidity needs and the treatment of family-held business interests
The discussion may also identify outdated assumptions, potential estate, gift or GST tax exposure, and wealth-transfer strategies that better reflect your current family circumstances and long-term goals.
What to ask:
Before we finalize an expansion, acquisition or facility investment, what tax incentives or structural considerations could materially affect the economics of the project?
What we're seeing:
Many traditional manufacturers are in expansion mode, driven largely by accelerated depreciation, supply-chain changes and tariff considerations that encourage repatriation.
Common planning gap:
Making ownership and expansion decisions before evaluating the tax consequences and forming a capital allocation strategy
For many private companies, growth plans can create opportunities to improve after-tax returns, but only when tax considerations are evaluated alongside operational goals.
Domestic expansion planning is being heavily influenced by:
- Domestic manufacturing investments
- Tax incentives, such as accelerated depreciation, tied to facility expansion
- Supply-chain decisions
- Tariff considerations that are encouraging businesses to bring manufacturing capacity back to the United States
Growth initiatives often create tax opportunities, but eligibility can depend on ownership structure and project design.
Businesses planning to use accelerated depreciation incentives, for example, may encounter problems because of how ownership is structured. Specifically, incentives may become unavailable to owners who hold real estate of a business in proportions that differ significantly from ownership of the operating business.
Prepare for the conversation with your tax advisor
What to have handy
Help your tax advisor understand your growth plans before significant decisions or commitments are made. Useful information may include:
- Budgets and timelines for planned expansions, acquisitions or facility investments
- Current and proposed business and real estate ownership structures
- Capital expenditure, financing and supply-chain plans
What the conversation can uncover: Tax incentives, depreciation benefits or structural considerations that could materially affect the project’s after-tax economics
Reviewing the plans early may also reveal eligibility obstacles tied to ownership or project design and allow the business to evaluate alternatives before capital is committed.
What to ask:
How can we coordinate my investment strategy through an after-tax lens without increasing unnecessary risk?
What we're seeing:
As investors increasingly pursue tax-loss harvesting, gain management and broader portfolio tax efficiency, some authorities are intensifying their focus on tax-focused investment strategies.
Common planning gap:
Pursuing tax benefits without fully evaluating investment risk and economics
Investment decisions and tax outcomes are increasingly intertwined. For business owners managing liquidity events, concentrated positions or diversified portfolios, after-tax performance often matters more than headline returns.
Taxes can materially influence investment outcomes. Loss harvesting, gain management and asset-location decisions all affect after-tax returns. Coordinating tax and investment planning throughout the year can help business owners evaluate opportunities more effectively and avoid unintended consequences.
And with the U.S. Department of the Treasury indicating an increased interest in tax-aware investment products, it’s important to vet investment plans. Not every tax-aware investment strategy is a problem, but many of these strategies can seek a tax outcome that is inconsistent with the rules or doesn’t materially affect the economics. This is where additional focus and conversation should happen.
Prepare for the conversation with your tax advisor
What to have handy
Help your tax advisor understand your investment portfolio, anticipated transactions and broader financial objectives. Useful information may include:
- Current investment holdings, tax basis information and unrealized gains and losses
- Details of concentrated positions, digital assets or anticipated liquidity events
- Investment, cash flow and wealth-planning goals
What the conversation can uncover: How tax-loss harvesting, gain management and asset-location decisions could influence after-tax performance
Coordinating tax and investment planning may also reveal whether a strategy introduces unnecessary risk, conflicts with broader wealth objectives or requires additional review before implementation.
What to ask:
Could changing when and how I give to charity significantly increase the value of my giving?
What we're seeing:
Clients’ charitable inclinations are often tax-beneficial but not tax-motivated.
Common planning gap:
Failure to revisit charitable planning following changes under OBBBA
Tax benefits from charitable planning are increasingly tied to timing and projected income. Reevaluating charitable strategies in light of new rules, rather than automatically following historical practices, can lead to better long-term outcomes.
Clients are often surprised to learn that OBBBA rules could reduce the tax benefit of their charitable giving. Modeling long-term charitable plans utilizing projected income and planning to create or use carryovers within the five-year period are new planning techniques introduced by OBBBA. These rules and potential approaches include:
- 0.5% floor for itemized charitable deductions: Because only charitable contributions exceeding 0.5% of adjusted gross income will be deductible beginning in 2026, the timing and structure of charitable gifts may have a greater effect on tax outcomes than in prior years. Accelerating contributions, bunching multiple years of gifts into a single tax year, using donor-advised funds or managing charitable carryforwards may improve deduction utilization and preserve available tax benefits.
- Charitable 50%, 30%, 20% bucket limitations: Because deduction limits vary based on the donated asset and recipient organization, taxpayers may not receive the full benefit of a contribution in the year it is made. Revising asset selection, gifting structures and contribution timing could improve deduction utilization and manage potential carryforwards.
- Itemized deduction limitation: As revamped by OBBBA, the overall itemized deduction limit reduces itemized deductions for certain taxpayers with income in the 37% bracket. Comparing alternative giving scenarios and modeling the combined effect of the overall itemized deduction limit and the other charitable deduction limitations when evaluating large gifts or liquidity events can help quantify the impact of the limitations and identify opportunities to restructure your giving.
In addition, other strategies, such as contributing privately held business assets during your life at adjusted basis before a sale (and thus avoiding tax on appreciated assets), could be more valuable than waiting to contribute cash after the sale.
Prepare for the conversation with your tax advisor
What to have handy
Help your tax advisor understand your charitable goals, available assets and anticipated income. Useful information may include:
- Planned gifts and information about the intended charitable recipients
- Tax basis and fair market value information for appreciated assets
- Details of anticipated future income, liquidity events and your estate plan
What the conversation can uncover: Whether the timing, type and structure of a charitable gift could increase its overall impact and improve the use of available deductions
The discussion may also help compare contributing appreciated assets before a transaction with donating cash afterward, while accounting for deduction limitations, carryovers and projected income.
What to ask:
How do I prepare for my 2026 QOZ tax liability and for the renewed QOZ program in 2027?
What we're seeing:
Investors in the original QOZ program are analyzing the Dec. 31, 2026, gain-recognition deadline and consequent tax liabilities, while looking ahead to liquidity planning, valuation considerations and coordination among investment, tax and wealth advisors.
Common planning gap:
Not preparing for and limiting the liquidity needed to satisfy future tax liabilities
Many clients view the Dec. 31, 2026, QOZ gain-recognition deadline as a payment date with the amount of the gain already set years ago. The potentially significant tax bills due in April 2027 can be limited through practical planning around the value of the investment to limit gain recognition or by triggering existing losses in your portfolio. Quantifying potential tax liabilities, evaluating available liquidity and considering related planning opportunities now can make a huge difference.
In addition, although the original QOZ program attracted significant capital, many investments have not performed as well as anticipated. Investors should reassess both the tax consequences and the underlying economics of their QOZ investments to determine whether the investment ultimately delivered the expected results.
Prepare for the conversation with your tax advisor
What to have handy
Help your tax advisor understand your existing QOZ investments and readiness for the related tax liability. Useful information may include:
- Original investment records and the amount of deferred gain
- Current valuations, performance reports and anticipated exit plans
- Cash flow projections and available liquidity for upcoming tax payments
What the conversation can uncover: Ways to limit and create liquidity to pay the potential tax liability associated with the Dec. 31, 2026, gain-recognition deadline
The discussion may also provide an opportunity to reassess the investment’s underlying performance and consider how that experience could inform future decisions under the renewed QOZ program.
Making individual tax planning part of every major decision
Individual tax planning is most useful when it happens alongside the decisions that shape your business and wealth. Before committing to an expansion, selling an asset, making a significant charitable gift or changing an estate plan, consider the tax consequences and the options available to you.
Bringing your tax advisor into those conversations early can help you understand how different choices may affect cash flow, investment returns and the wealth you ultimately transfer. Once a transaction is complete, some of those choices may no longer be available.
Frequently asked questions
There is no single strategy that is best for every family; effective generational wealth planning should always start with your individual goals. After establishing your goals, you can quantify how much wealth may reach heirs after taxes, liquidity needs and the treatment of family-held business interests. A review of estate documents, ownership structures, trusts, significant gifts and succession plans can identify outdated assumptions and potential estate, gift or generation-skipping transfer tax exposure.
Modeling different transfer strategies before a transition event can give a family more flexibility to preserve wealth and align the plan with current family circumstances and long-term goals.
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