Trick or...Taxes?

When I was growing up, after my sister and I completed our Halloween romp around the neighborhood, my parents would dump out our trick-or-treat bags and sort through our haul. At first, they were looking for anything dangerous, like the proverbial razor blades in apples.

(Incidentally, the “razor blades in apples” and other fears of candy tampering are based almost exclusively on urban legend. While there have been a few documented cases of candy tampering, almost all of them have turned out to be false or hoaxes, usually created by the affected child.)

Then one year, when I couldn’t have been any older than 5 or 6, I noticed my dad start isolating all of my mini-Snickers bars and not putting them back in my bag when he’d finished checking everything. I asked him what he was doing, and he said, “Your mother and I pay taxes to pay for things like roads, the police, firefighters and schools. You live in my house, you eat my food and you use my water. So these Snickers bars? These are the taxes you’re paying me for the privilege of having all those things.”

That was my first lesson in taxation, and clearly it stuck. Years later, I asked my dad about this, and he remembered it as well. The irony of the whole thing was that it turns out that he didn’t really even like Snickers bars all that much, but he knew that I did. (Had I been smarter, I would have hidden as many Snickers bars as I could before my dad checked my bag, kind of like a Snickers IRA plan.)

While the IRS isn’t going to dump out your Halloween bag and take your candy, they will work diligently to collect the tax revenue that they’re due. At Woodward Financial Advisors in Chapel Hill, NC, part of our Wealth Management service is to make sure you don’t give up any of your hard-earned assets by paying more taxes than you absolutely have to.

Whether it’s maximizing your workplace retirement plans with pre-tax dollars, making tax-efficient investments and sales in after-tax brokerage accounts, or strategically converting Traditional IRAs into Roth IRAs for the benefit of future tax-free gains, we work with our clients to accomplish their long-term financial goals without running into the Tax Boogeyman.