Here are five big picture thoughts on tax, from a career tax guy.
1) Don't overthink things. It's important to distill what we are doing for tax down to its true economic reality. We want to go with the simplest possible way of getting to our desired result. More complex solutions risk failure due to screw-ups in execution, and they open up more paths for the IRS to challenge results they don't like.
2) Always consider the practical consequences of tax planning. One of the biggest issues I consistently see among successful people is that they are limited not by money, but by their mental bandwidth to handle new things. Be sure that the financial gain of a particular tax strategy is worth the added complexity and hassle.
3) If the plan doesn't make common sense, the IRS can probably find a way to blow it up. The smell test is real. Tax law resists contrived solutions, namely by giving the IRS and the court system significant latitude to ignore transactions that don't exist for non-tax reasons.
4) Measure three times, cut once. Our ability to influence the tax consequences of transactions goes down dramatically after those transactions have already taken place. I always encourage our clients to be as communicative as possible - if it's a simple question, we can give a quick answer, but if there is something that requires more thought, we need to know as soon as possible.
5) Plan for a world where long term tax rates could be significantly higher than now. The Republican Party had its chance at the tax package of its dreams in 2017-2018, which resulted in the Tax Cuts and Jobs Act. Only the collapse of Build Back Better in 2022, largely for non-tax components, has stopped some sort of rate hike so far. Over the coming decades, the country is looking at an enormous fiscal deficit due to Social Security and Medicare, and the federal government will have to raise more revenue. The absolute best case for tax rates is that they tread water, but some sort of increases - even for the middle class - seem likely over the next five to fifteen years.