MCAT for Financial Success: A Doctor’s Guide to Smart Money Moves

By: Ryan Moran, CFA, CPA, CFP® It is that time of year. Again. Tax season. A strategic approach can help reduce tax liability and even increase potential refunds. However, navigating the complexities of the tax code can be overwhelming, and missing out on valuable credits or deductions could mean leaving money on the table. That’s why working with a qualified tax professional—such as an Enrolled Agent (EA) or Certified Public Accountant (CPA)—alongside your financial advisor is essential. A tax professional can ensure you’re taking full advantage of available credits and deductions while aligning your tax strategy with your long-term financial goals. In this article, we’ve highlighted some of the most common tax credits and deductions that are available for 2024. The hyperlinks within the article will direct you to the relevant IRS source. Feel free to share this article with your tax professional. If you don’t have one, give us a call, and we’d be happy to recommend one. Tax credits are dollar-for-dollar reductions in your total tax liability, and in some cases, may increase your refund. The Earned Income Credit is available if your income is low and/or you have children. The Child Tax Credit is up to $2,000 per child under age 17 for married couples making less than $400,000 or single taxpayers making less than $200,000. If you pay for someone to care for your child or dependent, you may be eligible for the Child and Dependent Care Credit . This applies to children under age 13 and other dependents who are unable to care for themselves and live with you for more than half the year. The credit is up to 35% of qualifying expenses, to a maximum of $3,000 for one or $6,000 for two or more children or dependents. A credit is also available for costs associated with adopting a child. There are two education credit programs available for eligible post-high school tuition. The first education-related credit is the American Opportunity Tax Credit , which offers a maximum annual credit of $2,500 to offset tuition for an eligible educational institution, often reported to you on Form 1098T. Students are eligible for four years of this tax credit. The second education-related credit is the Lifetime Learning Credit , worth up to 20% of the first $10,000 of qualified post-high school education expenses, up to $2,000. Students do not need to be pursuing a degree or other credentials, meaning online classes and job improvement courses may be eligible. The Energy Efficient Home Improvement Credit can help homeowners offset qualifying improvement expenses for exterior doors, windows, air conditioners, water heaters, and furnaces. Similarly, the Residential Clean Energy Credit is for solar or wind generation, solar water heaters, and battery storage. If you purchased a new or used clean vehicle —such as an electric car—you may be eligible for a credit of up to $7,500. There is a credit for making contributions to an IRA or employer retirement plan. The Retirement Savings Contributions Credit is 50%, 20%, or 10% of your contributions, but phases out completely once your income is above $76,500 if married or $38,250 if single. Students and dependents are not eligible. The Premium Tax Credit helps offset the premiums of purchasing health insurance through the Health Insurance Marketplace. This is particularly helpful for families in early retirement, before being eligible for Medicare. The amount of this credit is significant and can be received in advance to lower monthly insurance premiums. The Foreign Tax Credit offsets taxes paid to a foreign country on income also subject to US tax. This is more common than you may think. Frequently, international investments, through structures like mutual funds and ETFs, pay this tax and report it to you via the Form 1099. If you paid more than $10,453 Social Security tax in 2024, per person, any excess is refunded via a tax credit. This may happen if you made more than $168,600 last year, maybe spread over multiple employers. Although not a credit, interest income received from US Treasury bonds is exempt from state income taxes. This percentage is frequently reported by mutual funds and ETFs, but you need to look it up yourself. It may not be reported to you on the Form 1099. And you need to make an adjustment on your state tax filings. Speaking of state tax filings, if you have investments in tax exempt municipal bonds or funds, make sure you adjust for any interest received from in-state issuers. That interest may also be exempt from state tax. Wisconsin, for example, offers a $300 credit for property taxes or rent paid. Check with your state for similar credits. Tax deductions are different from tax credits-they reduce your taxable income. The 2017 Tax Cuts and Jobs Act (TCJA) removed most tax deductions available to individuals, particularly some “itemized deductions” which were replaced with a much larger “standard deduction.” But some options are still available. Contributions to employer-sponsored retirement accounts, such as a 401(k), are considered tax deductions, along with Traditional IRAs. Highland Investment Advisors can guide you on the contribution limits to these types of accounts. If your taxable investment portfolio incurred capital losses , you can deduct up to $3,000 from your income after offsetting any capital gains you may have realized. Additional losses can be used in subsequent years. If you sold your home for a profit, up to $500,000 of gains are excluded from tax, if married, or $250,000 if single. Contributions to Health Savings Accounts (“HSAs”) are particularly powerful. For 2024, contributions up to $8,300 are tax deductible for a family. Earnings within the account are tax exempt. So are withdrawals used for eligible medical expenses. HSAs are “triple tax-exempt.” Teachers can deduct up to $300 for certain unreimbursed classroom expenses. Wisconsin also offers a deduction from your taxable income for contributions to Wisconsin’s 529 College Savings plan. For 2024, the deduction is up to $5,000 of contributions per beneficiary. For 2025, the deduction increases to $5,130 per beneficiary. Most of these tax credits have limitations which may reduce the amount you are eligible for if your income exceeds certain amounts. All of these tax credits have a variety of eligibility requirements which need to be met. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication or future results. Opinions expressed herein are solely those of Highland Investment Advisors, LLC and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Highland Investment Advisors, LLC a SEC Investment Advisor.

Below is a summary of the fourth-quarter 2024 market performance and economic commentary. The full market performance report (PDF) , including commentary and charts, can be found here . Market Performance 📈 The US equity market posted positive returns for the quarter and outperformed both non-US developed and emerging markets. Value underperformed growth and small caps underperformed large caps. 📉REIT ( real estate investment trusts) indices underperformed equity market indices. 📈 Within the US Treasury market, interest rates generally increased during the quarter. In terms of total returns, short-term US treasury bonds returned -0.83% while intermediate-term US treasury bonds returned -1.70%. The yield on the 10-Year US Treasury Note increased 0.77% to 4.58%. 📉The Bloomberg Commodity Total Return Index returned -0.45% for the fourth quarter of 2024.

Highland Investment Advisors LLC is committed to helping families achieve prosperity and peace of mind through: 1️⃣ Investment advice 2️⃣ Integrated financial planning 3️⃣ Tax minimization strategies As fiduciaries, we are fully aligned with the families we serve. 🤝 Highland specializes in guiding families in the rapid accumulation phase toward financial independence and working with retirees or near-retirees on effective distribution strategies. 📅 Schedule a 30-minute discovery call today to learn more: https://meeting.levitate.ai/#/landing/e66ead-8x6v2g 

These are the cornerstones of our approach to portfolio management philosophy, ensuring your investments are aligned with your goals and built for long-term success. Simple, low-cost, and tax-efficient investing that focuses on long-term growth and minimizing unnecessary risks. Disciplined, diversified strategies designed to avoid costly mistakes and deliver consistent, market-based returns. Personalized portfolios that balance growth, risk reduction, and inflation protection to help you achieve your financial goals. Looking for a deeper dive on the principles that guide our investment philosophy? Continue below. Simple, Low-Cost, and Tax-Efficient We believe in keeping your investments simple, low-cost, and tax-efficient. By simplifying the process, you gain a clearer understanding of how your money is working for you. A highly diversified, low-cost strategy frequently generates better long-term results, allowing you to take on just the right amount of risk to achieve your goals. Avoid Costly Mistakes Successful investing is about avoiding common mistakes—chasing “hot” stocks, trying to time the market, or reacting emotionally to short-term news. Our disciplined approach helps you avoid these pitfalls and capitalize on long-term opportunities to grow your wealth. Reject Wall Street’s High-Cost Games We stay clear of Wall Street’s high-fee, complex products designed to generate profit for them, not for you. Our focus is on straightforward, transparent investment strategies that keep your costs low and your goals in sight. Passive Strategies Outperform Most active managers fail to consistently beat their benchmarks over time. We focus on achieving market returns through a passive, diversified approach, reducing unnecessary risk, costs, and taxes that eat into your returns. Maximize After-Tax Returns It’s not just about what you make—it’s about what you keep. Our strategies focus on maximizing after-tax returns by leveraging techniques like tax-loss harvesting, asset location, and rebalancing, all while minimizing taxable events. Smart Risk for Your Goals The right portfolio is one that takes on enough risk to help you meet your long-term financial goals, but not so much that it keeps you awake at night during market volatility. We carefully balance growth assets, risk reduction strategies, and inflation protection to match your risk tolerance and financial objectives. Know Your Investments’ Purpose Every investment has a role. Some aim for growth, some reduce risk, and others protect against inflation. We ensure that each piece of your portfolio serves its purpose, creating a balanced strategy that works for you over the long term. Global Diversification for Stability We invest globally to increase diversification and minimize risk. By holding a wide array of assets across geographies, your portfolio is less dependent on the performance of a few sectors or countries, providing a smoother path to growth. Risk Reduction Without Compromise Risk reduction strategies, like cash and bonds, form the foundation of your portfolio. These assets protect your wealth and help you weather volatility, but we carefully manage the risks associated with them, such as interest rate sensitivity and taxation. Use of Non-Correlated Strategies We include non-correlated assets and select alternative strategies when appropriate. These investments don’t move in line with traditional markets, providing additional diversification and stability. However, they come with tradeoffs, like tax inefficiency, so they are used thoughtfully.

We approach every client relationship with an open mind, free from preconceived ideas about what you should or shouldn’t do. That’s why we start by listening—taking the time to understand your situation through thorough fact-finding. By asking insightful questions, we gain clarity on your goals. Through open and honest dialogue, we help you prioritize what’s most important. During this stage, we also assess your ability and comfort with taking on risk. Next, we analyze your current investments and financial position to formulate a strategy tailored to you. From this, we create a purpose-driven, actionable plan. We ensure you are part of the process every step of the way—adjusting, confirming, and fine-tuning the plan until you’re completely comfortable with the recommendations. Only then do we move forward with implementation. Once the plan is in motion, our work doesn’t stop. We continuously monitor your progress, anticipate changes, and make adjustments as needed. Financial planning is an ongoing journey that evolves with you, ensuring you stay on track through every stage of life.

Successful ESTATE ADMINISTRATION means that your intentions are met and your family is cared for. Critical Questions Highland Can Help You Answer: What happens to my assets when I pass away? Who will oversee my estate and ensure my wishes are carried out? What does my Will actually specify, and does it reflect my current intentions? How should my accounts be titled to align with my estate plan? Who are my listed beneficiaries, and are my contingent beneficiaries up to date? Do I need a trust, and if so, what kind? How does life insurance factor into my estate plan? How can I approach conversations with my parents about their estate plan? Can my advisor work with my estate planning attorney to achieve better results? Smart TAX PLANNING Identifies Opportunities to Reduce, Defer, or Eliminate Taxes—Now and Over Your Lifetime Critical Questions Highland Can Help You Answer: How much am I currently paying in taxes, and where can I find savings? Are there strategies to reduce how much I owe? Am I contributing enough to my retirement accounts to maximize tax advantages? Are there any tax credits or deductions I qualify for? What does it mean to eliminate taxes, and how can it apply to my financial situation?

We are excited to announce the opening of our new office at 175 Patrick Blvd, Suite 120, in Brookfield, Wisconsin, effective December 1, 2024. This move unifies three previous Milwaukee metro offices into a spacious, modern location that enhances both client convenience and team collaboration. “This new Brookfield office is thoughtfully designed to serve our clients and provide a collaborative space for our entire team under one roof,” said Adam S. Drake, CFA, owner of Highland. “Our growth through strategic acquisitions, like Fund Management Corp. and Stoeckler Financial, along with our expanding advisory team made this new, combined office the next step in elevating our client experience.” Adam Stoeckler, CFP®, a financial advisor with Highland, added, “Our combined office builds a stronger in-person community among our advisors, fostering a culture of collaboration and innovation that ultimately benefits our clients and staff.” About Highland: Founded in 2006, Highland manages over $300 million in client assets. As a fee-only wealth management firm, Highland offers customized financial advice and solutions that cater to the unique circumstances and objectives of each client.

Highland Investment Advisors, LLC Assumes Advisory Business of Professional Management of Milwaukee, Inc. (“PMM”). Scott J. Keipper, CPA/PFS, formerly of PMM, Joins Highland Team. Highland will now manage nearly $300 million in assets for over 500 clients. Ponte Vedra, Florida & Brookfield, Wisconsin: July 1st, 2024 We are pleased to announce that, effective July 1st, 2024, Highland Investment Advisors, LLC (Highland), an SEC-registered investment advisor based in Ponte Vedra (Nocatee), Florida, will succeed to the investment advisory practice of Professional Management of Milwaukee, Inc.—a Wisconsin registered investment advisor in Brookfield, WI (PMM) previously served by Investment Advisor Representative Scott J. Keipper, CPA/PFS. Highland also has offices in Delafield, Wisconsin, and Brookfield, Wisconsin. Adam Drake, owner of Highland Investment Advisors, expressed enthusiasm about the new addition: “We’re absolutely delighted to welcome Scott to our team! His expertise, especially in 401(k) and retirement plans, aligns perfectly with our goals. We are eager to collaborate with Scott to continue providing excellent service to his clients and to expand our capabilities together.” Scott Keipper added, “I am very excited to join Adam Drake and his team of advisors who place their clients’ needs ahead of their own to provide impartial advice in the best interest of their clients. I look forward to helping clients plan for their financial goals and thereby live more productive lives with less stress. As a CPA/PFS with more than 35 years of faithful service to clients, I understand that financial relationships are all based on a high level of trust which I have developed with clients. I look forward to the future working with clients and combining my tax background with the enhanced software and shared experiences Highland offers to benefit our common clients.” About Highland: Highland was founded in 2006. The firm’s mission is “to promote our clients’ prosperity while protecting their peace of mind.” As a fee-only wealth management firm, Highland offers customized financial advice and solutions that cater to the unique circumstances and objectives of each client. Highland partners with independent financial advisors who want to continue building fee-based practices or who are looking for a succession plan. For more information, contact: Adam S. Drake, CFA Managing Director & CCO adrake@highlandinvestmentadvisors.com 414-755-2309 x101

Highland Investment Advisors, LLC Acquires Stoeckler Financial Advisory Services, LLC. The Combined Firm Will Manage Over $220 Million of Assets for Over 400 Clients. This transaction was Highland’s third completed acquisition.