Tax-Aware Investing
A disciplined, evidence-based portfolio strategy built around the complications and cashflow considerations involved with running a business so more of your money compounds and less goes to the IRS.
Why Alonso Financial Planning Utilizes Dimensional Funds During Our Portfolio Construction Process
Strategies Backed by 40+ Years of Financial Science
Dimensional Fund Advisors has been applying Nobel Prize-winning research to portfolios since 1981. Their ETFs and mutual funds go beyond the passive indexing status quo. Dimensional has daily trading flexibility and decades of academic research to tilt toward the dimensions of the market with the strongest historical return premiums, while keeping costs and turnover low.
That research on active management for the pursuit of outsized risk adjusted returns is the foundation. What gets built on top of it is where the real planning happens.
I construct portfolios using Dimensional's ETFs and mutual funds as building blocks. Different market segments like core equity, small cap value, international, and short-duration fixed income, and depending on the individual, a real estate sleeve, assembled differently depending on which account holds them and what your personal situation demands.
The result is a coordinated system where every position has a purpose, every account has a role, and the whole structure is designed to maximize after-tax wealth, not just pre-tax returns.
Minimizing Tax Drag
Intelligent tax management isn't one specific strategy or tactic. It's a system of coordinated decisions across your accounts, your business, and your personal finances all working in tandem to create tax alpha.
Asset Location Optimization
By placing strategies with higher tax consequences inside a 401(k) or SEP-IRA, while tax-efficient strategies are within your taxable brokerage account, it can add meaningful boost to your after-tax return.
Systematic Tax-Loss Harvesting
By monitoring your taxable accounts for harvesting opportunities, capturing losses to offset capital gains and some ordinary income, while maintaining your target allocation with correlated replacement positions.
Roth Conversion Laddering
Many businesses have variable income. We can strategically convert pre-tax retirement dollars to Roth, effectively decreasing your total tax burden on retirement assets.
Distribution & Salary Coordination
Your S-corp salary and distribution split directly impacts your tax bracket, FICA exposure, and retirement contribution room. We coordinate your investment plan with your distribution strategy so nothing is left on the table
Gain Deferral & Tax Lot Selection
When rebalancing or raising cash, we can sell specific blocks of shares to sell the highest-cost shares first, deferring gains and reducing your current-year tax liability without compromising your portfolio structure.
Let’s Build Your Tax-Smart Portfolio
Schedule a complimentary consultation to see how a tax-aware investment strategy can work for your business and personal finances.