What the 2024 Tax Season Revealed About Wealth Strategy for High-Net-Worth Individuals
Each year, I step into the whirlwind of tax season, not just as a financial planner but as an Enrolled Agent with the IRS — preparing and reviewing complex returns at an accounting firm. For affluent clients, this dual lens gives me a dynamic view into how tax strategy and wealth planning intersect in real life — and where even successful individuals leave money on the table.
As the paper blizzard settles and we move past April’s filing deadlines, I’m taking a moment to reflect on what this year’s returns revealed — particularly for high-net-worth families and individuals. If you’re building and preserving significant wealth, these insights could save you hundreds of thousands over time.
Let’s dive into what 2024 taught us — and what smart, strategic wealth management should look like going forward.
Capital Gains and Tax Drag: Why Smart Investors Still Overpay
Capital gains were the Achilles' heel for many well-positioned investors this year. I saw countless high-income filers triggering massive short-term capital gains — often unknowingly — because their advisor didn’t have a tax lens.
Here’s the thing: capital gains aren’t bad. But without timing, coordination, or offset strategies (think: tax-loss harvesting, asset location optimization, or gifting highly appreciated assets), even “good” investment decisions can create unnecessary tax drag.
💡 HNW Strategy: Coordinate investment and withdrawal decisions across portfolios with a tax strategist. Tax alpha is real — and it’s one of the most underutilized performance levers for high-net-worth portfolios.
Philanthropy with Purpose: Structuring Giving for Maximum Impact
I saw many returns where individuals made small charitable donations but still ended up taking only the standard deduction, meaning their giving didn’t reduce their tax bill. So many people are unaware of a strategy called ‘gift-bunching,’ where consolidating donations into one tax year maximizes deductions.
As wealth advisors, we often recommend Donor Advised Funds (DAFs) to our clients. A DAF allows you to bunch your charitable giving into a single tax year, take the full deduction, and then thoughtfully distribute grants to your favorite charities over time. DAFs also create a beautiful legacy of giving with flexibility and control.
🫶🏿 Smart Tip: Philanthropy isn’t just about generosity. It’s about proactively managing the tax and wealth impact of your giving. By planning your giving with a tax-smart advisor, you can amplify your impact and have it positively impact your tax return.
Health: Your Wealth's Silent Partner
This season’s returns were a stark reminder that even wealthy individuals face significant, often non-deductible medical expenses. From concierge healthcare to long-term prescriptions to private care services, these costs add up — and most don’t meet the AGI threshold to qualify for tax deductions. This tax season reminded me how critical it is to view health as part of your wealth strategy. I saw high medical expenses on many returns and while some expenses were deductible (after exceeding the 7.5% AGI threshold), most were simply out-of-pocket costs with no tax benefit.
Good health habits today (think preventive care, fitness, mental wellness) aren’t just about living well; they’re a financial safeguard. Investing in your well-being now can reduce future healthcare costs that even the best insurance won’t cover.
While we can’t always deduct them, we can plan for them. Health, like wealth, requires foresight — especially if longevity runs in your family or you anticipate needing specialized care.
💡 Longevity Planning: As Benjamin Franklin is known for saying, “An ounce of prevention is worth a pound of cure.” The day to start focusing on your health is today. Schedule your primary care visit, as well as those specialist visits as needed – such as working seeing a dermatologist, doing your mammograms, prostate checks, etc. We can further protect against high-cost health surprises with strategic use of HSAs, long-term care policies, and lifestyle-focused financial planning.
Long-Term Care: The Quiet Risk to Legacy Preservation
For affluent individuals — especially women — long-term care (LTC) is the elephant in the estate plan. Many people are unaware that Medicare insurance doesn’t cover most LTC needs, and private long-term care can easily exceed six figures per year. In one case, I saw a return where her 1099-LTC (tax form issued when long-term care policies pay out) was almost $100k, and then there were an additional $200k of medical expenses that were itemized. If you’d like your parents and yourselves to have the best of care for those last few years of life, it pays to plan ahead.
Further, long-term care insurance isn’t just an expense — it’s a legacy tool. It preserves autonomy, protects assets, and offers substantial tax deductions based on age.
And if you’re a business owner, you may want to consider funding an LTC policy through your business entity.
💡 Advanced Move: Explore hybrid LTC policies with cash value or death benefit riders — offering flexibility andpeace of mind. If this is something you’re considering, the time to act is NOW! Too many people wind up developing health care issues as they age, which can impact their options and may increase premiums or ability to obtain coverage.
The biggest takeaway from 2024? The wealthy don’t just need tax prep — they need tax strategy. From investment coordination to charitable design to legacy protection, the most impactful wealth moves don’t happen in April. They happen year-round.
Let’s architect your next-level wealth strategy.
Whether you’re preparing for a liquidity event, navigating complex multi-generational planning, or just ready to reduce your tax drag, I’m here to help make every financial move smarter — and more strategic. And please note, LPL Financial does not offer tax advice. Always consult with your tax professional.
🐝 FAQ: 2024 Tax Strategy for High-Net-Worth Investors
Use tax-loss harvesting, shift appreciated assets into tax-efficient vehicles, and time realization of gains. You can also gift highly appreciated assets or use DAFs to offset gains.
DAFs let you bunch charitable donations—take a large deduction in one year without losing giving flexibility. That’s especially useful when your taxable income spikes in a given year.
Yes. Given medical and LTC costs often aren’t fully deductible, it’s wise to integrate them into your wealth plan ahead of time. Consider HSAs, long-term care policies, and reserving capital for health shocks.
That “tax strategy” can’t wait until April. 2024 showed many high earners underutilized proactive moves—like income smoothing, coordinated investments, or charitable bunching—that could have saved big. Real value happens year-round.
Now. As soon as you anticipate changes in income, capital events, or giving goals, loop in your tax planner. Waiting until filing season gives you fewer levers to pull—and often means leaving money on the table.