You’ve done most things right. You’ve built your business, honed your profession and cultivated your career into something to truly be proud of. You have accumulated assets, and you’re generating income from those assets. And, like me, you live in California.

Hey, we all enjoy the beauty of this state, and the many fruits she offers. Yet there’s a political storm brewing that could affect us here in the Golden State, and that storm is tax reform.

The current push toward tax reform in Washington could mean that Californians will end up paying more in combined federal, state and local taxes than ever before. Moreover, it is the tax burden on you, the wealthy, high-earning Californian, that’s going to get worse.

Did you know that in California, the total tax burden for a family earning $500,000 or more could be as high as 60% of their income? This may include; the highest federal tax bracket of 39%, the second-highest state tax bracket of 13%, property taxes, sales taxes, gasoline tax—and then there’s the fees and surcharges the state levies on almost everything.

And even if there’s some positive tax reform out of Washington, it’s hard to see it helping us much here in California. That’s especially true given the current political leadership in Sacramento.

So, what does a high-earning California family need to do to get a little tax relief? Here are a few ideas.

1. Get Mad. You’ve worked hard for your money and you deserve your success. That means you must commit to paying ONLY your fair share in taxes. You must take every deduction and allowance you are entitled to, and you must strategize about how to lower your tax burden with all available resources.

2. Get your team assembled. It’s not just your CPA’s job to lower your taxes, it’s yours and all your advisors. Rarely does your CPA know your complete financial situation. You need to tap your tax advisor, your financial advisor and your estate planning team to understand all the options to lower your taxes.

3. Get informed. Pull out your last two years of tax returns, both state and federal. Understand what’s driving your income and expenses. Know your tax bracket and the range of that bracket. You may be just a few thousand dollars away from a lower bracket.

4. Look at your investment assets and income. Capital gains are of little help in California for high wage earners since the combined rate on capital gains is at least 25%, but could be 33% after Obamacare taxes. Look at your interest and dividends. Are you receiving qualified dividends and tax-free income? Are you deducting investment expenses against your income?

5. Review your balance sheet. This is a statement of all your assets. Are there highly appreciated securities you could gift for an immediate charitable deduction? Could you take advantage of a Charitable Remainder Trust, get a tax deduction and retain the income stream?

6. Review your estate plan. It may not make sense to hold all your assets until you pass. Gifting now could be the gateway toward a lower tax bracket.

These six steps are just a starting point to lowering your income taxes in 2018. The biggest mistake high-income earners make is waiting to the last moment, or worse, waiting until their annual tax appointment, to discuss how to lower their taxes.

The time to lower taxes is right now!

The time to get started on lowering your taxes in 2018 is today. Get mad, and get moving.

Tax strategies are a high priority for clients of Mercer Advisors. We have a unique service offering for our clients, which includes tax strategy, estate planning, investment management, financial planning and asset protection… all for one fee.

At Mercer Advisors, we combine the services of five advisors with our in-house team of financial experts. Let us show you how we can put the power of ONE advisor to work for you. To set up a free consultation on lowering your taxes and increasing your cashflow in 2018, please call 805.565.2570 or reach me directly at 805-565-2524.