This time last year, financial advisors were scrambling to put into place last-minute tax strategies before lower rates were set to expire. In the end the deal that was reached in Congress—after the Jan. 1 deadline—wasn't as onerous as many had anticipated. This year financial advisors have some breathing room.
"From a planning standpoint, there isn't the same urgency to act at year-end as there was last year," said Tim Steffen, senior vice president and director of financial planning at Robert W. Baird & Co.
As 2014 approaches, advisors are finding themselves talking about some of the same themes they do year in, year out—at least, on the tax front.
This year, said Steffen, wise investors will be more aggressive about harvesting their losses to offset any gains. "Higher taxes make your losses more valuable because you're offsetting gains at a higher rate," he said.
Financial planner Sheryl Rowling, certified public accountant and principal of Rowling & Associates LLP, said she, too, is focused on helping her clients minimize the impact of both today's higher taxes and the potentially even higher taxes of tomorrow.
Some clients are finding that their income is lower this year than they had anticipated. That makes it a good time for a Roth IRA conversion, Rowling said. Ordinary income tax will be owed on the value of the conversion, but those in a lower bracket this year will owe less than in "normal" years.
(Read more: Key tips that can minimize the tax bite)