Proactive tax planning: Roth conversions, equity pay and giving, planned before tax season

What is proactive tax planning?

Proactive tax planning means choosing how and when income, gains, deductions and gifts happen before the year ends. You use the rules to shape the result, instead of learning the result at filing time. A CPA still files your return.

Seek First puts it this way: “Stop reacting to tax season. Have your tax life engineered by your financial CEO team so tax efficiency is hardcoded into every choice.”

Good tax planning is not about finding a trick. It is about timing and order. The same income can cost less or more depending on the year it lands, the account it comes from and what else happens that year. A few examples:

• You can move money from a pre-tax IRA to a Roth IRA in a year when your income is lower.
• You can give appreciated shares instead of cash.
• You can plan when to exercise stock options or sell shares from a vest.
• You can pair large gifts into one year to make itemizing worthwhile.

None of these fits every family. Each one trades a cost today for a possible gain later. The aim is to see the trade clearly, then decide with your CPA and your planner.

Seek First lists its tax work in plain terms. For Tax Strategy & Filing, the firm says it will create proactive tax strategies and plans, identify opportunities to reduce taxes over time, and monitor changes in income, investments and laws.

A year-end review is a good habit. Before December, gather the facts your plan needs:

1. Your year-to-date income, including bonuses and stock vests
2. Gains and losses in your taxable accounts
3. Planned gifts to your church, ministry or donor-advised fund
4. Retirement account balances and any required withdrawals
5. Changes in your family, home or job that affect your return

Bring that list to your CPA and planner together. Small moves made in November can matter more than large ones made in April, because the year is still open.

How is proactive planning different from tax preparation?

Tax preparation reports what happened last year. Tax planning chooses what happens this year and next. Both matter. Preparation keeps you compliant. Planning gives you choices while they still exist.

The client says it this way: “Most CPAs excel at reporting the past, but we specialize in optimizing your future.” Seek First also notes the plan covers “both this year and for decades to come.”

Planning needs facts from all over your financial life. Your CPA knows your return. Your investment manager knows your gains. Your attorney knows your trust. When those people do not talk, the plan has gaps. That is why Seek First works as one team. The firm’s How We Serve page says its tax work includes paying taxes such as “quarterly estimates, property tax, and entity tax.”

When does a Roth conversion make sense to ask about?

Ask about a Roth conversion when your income is lower than usual, when you want tax-free growth for the future, or when you want to lower future required withdrawals. The tax is due on the converted amount in the year you convert.

A Roth conversion moves money from a pre-tax IRA to a Roth IRA. The IRS says: “A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA.” IRS Publication 590-A says converted amounts “are normally included in income on your return for the year that you converted them.” Also, “A Roth IRA conversion made on or after January 1, 2018, cannot be recharacterized.” That means you cannot undo it. IRS Topic 309 adds that, regardless of your adjusted gross income, you may be able to convert.

Here are questions to ask before you convert:

1. What will the tax cost be, and how will I pay it? Paying from outside the IRA keeps more money working in the Roth. Your CPA should confirm.
2. What bracket am I in now, and what might I be in later? Required withdrawals can raise future income. See required minimum distribution.
3. Will the extra income raise other costs? Medicare sets some premiums by income from two years earlier. The 2026 Medicare cost sheet uses “yearly income in 2024.” Read about IRMAA.
4. How does my state treat it? Ask your CPA how California taxes the conversion.
5. Do I want to leave Roth money to heirs? Ask your attorney and CPA how Roth money passes to heirs.
6. Do I have a plan for giving? A large conversion year can pair well with a large gift. See bunching charitable deductions.

For a longer list, read our guide to Roth conversion questions. A related idea is the backdoor Roth IRA. It has its own rules, so ask your CPA first. This page is education, not advice for your return.

How are RSUs, ISOs and ESPPs taxed?

Each type of stock pay is taxed at a different moment. RSUs are generally taxed at vesting. ISOs are generally not taxed at grant or exercise but may trigger the alternative minimum tax. ESPPs depend on how long you hold the shares.

Here is a comparison from IRS sources. It is general, and your plan documents control.

RSUs. A restricted stock unit is a promise of shares. When it vests, the value is generally taxed as pay. If you hold the shares afterward, a later gain or loss is separate. Many families sell some shares at vest to cover the bill. Others hold. That choice is part of your investment plan, since a large share of your wealth may sit in one company. Read the blog post on an RSU year-end tax checklist.

ISOs. The IRS says: “If you sell stock acquired by exercising an ISO, you need to determine if you satisfied the holding period requirement.” If you do not, part of the gain can become ordinary income. The alternative minimum tax is a second tax calculation that can apply in the year you exercise. Run the math before you exercise. See the post on ISO exercise and AMT questions.

ESPPs. The IRS says that if you sold stock from an employee stock purchase plan and met the holding period, you figure your ordinary income by a set method. Dates matter. Keep your records.

California. The Franchise Tax Board says that if you exercise nonstatutory stock options as a California resident, “the resulting compensation is taxable by California because the wage income is recognized while you are a California resident.” For people who worked in more than one state, the FTB says California taxes wage income “to the extent you performed services in this state.” Ask your CPA how this applies to you.

This section explains how the rules work. It is not a view on any company’s stock. For the full guide, see equity compensation: RSUs, ISOs and ESPPs.

How does giving reduce taxes?

Giving can reduce taxes when you pick the right asset and the right year. Cash, appreciated shares and IRA money are treated differently. Rules and limits change by year, so confirm the current figures with your CPA.

Start with why you give. Taxes should shape how you give, not whether you give. 2 Corinthians 9:7 teaches that giving should be cheerful and not forced. Planning helps you give more of what you intend and less to the tax bill.

The main tools:

IRS Publication 526 says a QCD is made “directly by the trustee of your individual retirement arrangement” to certain organizations. The page says, “You must have been at least age 70½ when the distribution was made.” It also says that if the QCD is nontaxable, “you can’t claim it as a charitable contribution deduction.” So you get one benefit, not two. The page lists a yearly QCD cap. Check the current figure.

Seek First treats giving as part of the tax plan. Its Generosity and impact work includes “Optimize charitable giving” and “Manage gifting of assets.” For the full topic, read charitable giving strategy. For the theology of giving, see biblical stewardship.

What can an in-house CPA team do that a separate CPA cannot?

An in-house CPA team sits next to your planner, so tax filing and tax planning share one set of facts. A separate CPA can do excellent work too. The difference is how closely the two teams talk.

Seek First gives you a choice. The firm says: “Choose our in-house CPA team for a fully integrated, hands-off filing experience, or let us partner directly with your existing CPA.” You do not have to switch CPAs to get planning.

Seek First lists what it does under Tax Strategy & Filing:

1. Create proactive tax strategies and plans
2. Identify opportunities to reduce taxes over time
3. Monitor changes in income, investments, and laws
4. Pay taxes (quarterly estimates, property tax, and entity tax)
5. File taxes, completed by the in-house CPA

Either path has the same goal. Your investment moves, your gifts, your retirement withdrawals and your estate plan should line up with your tax plan. Read how retirement planning and trust and estate planning connect to it. The firm’s five pillars of its Comprehensive Financial Strategy are taxes, investments, legal, insurance and goals.

This page is general education. It is not tax advice. The firm says its material “is not intended as tax or legal advice” and asks you to consult tax or legal professionals about your own situation.

Next step

Tell us about your tax picture on a free 20-minute call, and we will show you how proactive planning works with your CPA or ours. Schedule a free call or phone (866) 398-4044. To see every service, visit how we serve.