<aside> <img src="notion://custom_emoji/6f37062d-3fac-4c1d-b735-4ef31961b375/2842b4da-5269-808c-b088-007a082ab704" alt="notion://custom_emoji/6f37062d-3fac-4c1d-b735-4ef31961b375/2842b4da-5269-808c-b088-007a082ab704" width="40px" />

Before diving into the nuts and bolts of tax saving strategies, let’s align on how you should think about taxes. I promise it’s only slightly woo-woo… but in turn, this guide will make some of our other recommendations make a lot more sense!

</aside>

Table of Contents

The Three Lenses for Tax Minimization

Every tax decision should be evaluated through three critical lenses that work together to optimize your overall financial picture.

Lens 1: Your Effective Tax Rate

Your effective tax rate is what you actually pay — total taxes divided by total income. This is your scorecard for the current year.

How to Calculate:

• Total all taxes paid (federal, state, local, payroll)
• Divide by gross income
• Result = your effective rate

Why It Matters:

• Shows the real impact of deductions and credits
• Helps compare different strategies
• Reveals if you're overpaying

Example: $300,000 gross income $75,000 total taxes paid = 25% effective rate (not your 35% marginal rate)

Lens 2: Your Lifetime Tax Rate