In the spirit of Valentine’s Day, we found it fitting to celebrate a love that we all can get behind: elegant, straightforward tax strategies. Whether you’re familiar with Gary Chapman’s book The Five Love Languages or not, we’re confident you’ll be able to get behind our version: The Four Languages for Lovers of Tax Efficiency.
This person is always seeking to put others first. The true gift giver knows the last thing most of us need is more stuff. Instead, they focus on giving the gift of financial security to anyone in their circle. In 2025, the gift giver can give up to $19,0001 (this is called the gift tax exemption) per recipient without having to file a gift tax return. Gift giving couples can combine forces and gift up to $38,000 per recipient.
Oftentimes, the gift giver is related to the end beneficiary. We call this person the one who is ‘family first.’ They focus on setting their family up for success through all the big milestones and they have many tax planning tools in the kit to help them do so.
For the family first giver seeking to maximize education planning, they can donate up to 5 years of the gift tax exclusion in one year to a beneficiary’s 529 (where it can be invested and grow tax-free). In 2025, this equates to a $95,000 contribution2 and couples can double the contribution amount to $190,000. Note that this strategy will require filing IRS Form 709, the gift tax return, to indicate the gift is being spread over five years.
These family first givers can also make payments for tuition directly to the institution and avoid gift tax altogether, even if the total expenses exceed $19,000 per individual for the year.3
They may also be interested in passing on wealth to the next generation during their lifetime for purposes other than education. One way to achieve this is by maximizing the interplay of the gift tax exclusion and capital gains tax rate. This strategy works best when the recipient is in a low tax bracket (ideally, the 0% capital gains bracket). If the benefactor has significant gains in their taxable investment account, they can donate shares to the next generation (up to the gift tax exclusion, to avoid complexity). The financial planner can then determine the beneficiary’s income tax picture and sell gifted shares strategically for tax and diversification purposes. Through this strategy, the giver successfully gifts to the next generation and both parties mitigate—or in some cases avoid altogether— capital gains tax in the process.
The do-gooder focuses on charitable intent, and they know charitable giving and tax planning are like chocolate and peanut butter in a Valentine’s Day candy box. Luckily for the do-gooder, they have a wide range of options available to them. They can donate cash, long-term appreciated stock (ensure it is held at least twelve months), or even real estate to a qualified charity. They also utilize several vehicles they can donate through including a Donor Advised Fund, Charitable Remainder Trust, Family Foundation, or simply a gift directly to charity (they can even gift from their IRA tax-free, so long as they are over 70½).4
As beneficiaries, charities do not pay income tax. So, the do-gooder may also want to consider naming their favorite charities as beneficiaries to their least tax-efficient assets (like traditional 401(k)s, 403(b)s, and IRAs).
Who better to give to than your future self? No one understands this clearer than the futurist. This individual recognizes the power in tax diversification by maximizing contributions to various investment vehicles. They invest in their tax-deferred employer sponsored plan, make Roth (or backdoor Roth if they’re over the income level) contributions, and practice a disciplined approach to investing in their taxable brokerage account (to name a few investment vehicles at their disposal).
Curious to learn more about the various strategies available to help satisfy your goals with tax efficiency? Give us a call, we’re here to listen and help discover which language of tax strategy suits your needs best!
Sources:
1 What's new — Estate and gift tax | Internal Revenue Service
2 10 Rules for Superfunding a 529 Plan in 2025
3 Tuition Gift Tax Exclusion: Pay for College and Save on Taxes
4 Qualified charitable distributions allow eligible IRA owners up to $100,000 in tax-free gifts to charity | Internal Revenue Service
Disclosures:
Apella Capital, LLC (“Apella”), DBA Apella Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or excluded or exempt from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, product or any non-investment-related content made reference to directly or indirectly in this material will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions. Please note the material is provided for educational and background use only. Diversification seeks to improve performance by spreading your investment dollars into various asset classes to add balance to your portfolio. Using this methodology, however, does not guarantee a profit or protection from loss in a declining market. Past performance does not guarantee future results. All data is from sources believed to be reliable but cannot be guaranteed or warranted.
No current or future client should assume that any discussion or information contained in this material serves as the receipt of, or as a substitute for, personalized investment advice. As with any investment strategy, there is the possibility of profitability as well as loss.
Apella Wealth does not provide insurance services or legal advice and nothing either stated or implied here should be inferred as providing such advice.