Works through the legal tax-reduction sequence - tax-advantaged account priority, standard-vs-itemized decision math, tax-loss harvesting, income timing, and Roth-vs-traditional rules - and produces a personal tax checklist. Use when someone asks "how do I pay less in taxes", "should I itemize", "Roth or traditional", "what is tax-loss harvesting", or is doing year-end planning or reviewing withholding. Do NOT use for the broader ordering of savings and debt priorities - use financial-planner instead; for investing fundamentals beyond account tax treatment - use investment-basics; for projecting retirement account balances - use retirement-projection.
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name: Tax Optimization
description: Works through the legal tax-reduction sequence - tax-advantaged account priority, standard-vs-itemized decision math, tax-loss harvesting, income timing, and Roth-vs-traditional rules - and produces a personal tax checklist. Use when someone asks "how do I pay less in taxes", "should I itemize", "Roth or traditional", "what is tax-loss harvesting", or is doing year-end planning or reviewing withholding. Do NOT use for the broader ordering of savings and debt priorities - use financial-planner instead; for investing fundamentals beyond account tax treatment - use investment-basics; for projecting retirement account balances - use retirement-projection.
---
# Tax Optimization
Tax optimization is not aggressive schemes - it is using every legal mechanism already built into the tax code, in the right order. Most people leave significant money on the table not through bad decisions but through unmade ones: an uncaptured employer match, a default standard deduction never compared against real itemizable expenses, losses in a brokerage account never harvested. Work the sequence; skip nothing silently.
## Operating procedure
### Step 1: Gather inputs
Label uncertain figures as guesses; the user's latest return and pay stub resolve most of them.
1. Filing status and approximate gross income (which sets the marginal bracket).
2. Access to employer retirement plans and the match formula; current contribution rate.
3. Eligibility for a health savings account (enrollment in a qualifying high-deductible health plan).
4. Potential itemizable expenses: mortgage interest, state and local taxes, charitable contributions, large medical expenses.
5. Taxable brokerage holdings and any positions at a loss.
6. Control over income timing: freelance/business income, year-end bonus, equity compensation.
### Step 2: Fill tax-advantaged accounts in priority order
This order exists because each rung pays more per dollar than the one below it:… load the full skill through Skill Me