For years you thought creating wealth meant saving as much as possible – taking advantage of all of the available tax deductions, contributing to a retirement account and diversifying investments. Saving for retirement is important, but conventional advice is not enough to build wealth and financial freedom. The following are just a few strategies for creating and preserving wealth you might not be currently implementing.

PROACTIVE TAX PLANNING

Tax planning is not something that happens only at year end. Establishing a year round tax plan can help you reduce taxes and achieve your financial goals. A few tax planning opportunities that are often overlooked include:

Charitable Donations – If you make a donation to a qualified charity, you may be eligible to receive a tax deduction on your federal and state return. Generally, you can deduct cash contributions up to 50 percent of your adjusted gross income, property contributions up to 30 percent of your adjusted gross income and contributions of appreciated capital gains assets up to 20 percent of your adjusted gross income.

Harvesting capital losses – When you have a capital gain, you owe capital gains tax. However, the capital loss can either offset the capital gain. If there were no capital gains during the tax year, you could use up to $3,000 to reduce your regular income (if net losses exceed $3,000, you can carry forward any unused losses into future tax years).The long-term capital gain tax rate is 10 percent for taxpayers in the 15 percent tax bracket and below, 15 percent for those in the 25 percent to 33 percent tax brackets, and 20 percent for those in the highest income tax bracket. With the Affordable Care Act, those in the highest income tax bracket will be subject to an additional 3.8 percent tax on investment income.

Maximizing Tax Brackets – U.S. tax rates are at historical lows, and your tax bracket is the rate you pay on the last dollar you earn (your tax rate is generally less as a percentage of your income). Taxable income is regularly taxed income minus adjustments, deductions, and exemptions. Qualified dividends and long-term capital gains are separate calculations. If you are in a lower tax bracket now, you are missing opportunities to take advantage of potential transfers that can result in smart financial gains.