Tax planning for Round Rock households

Texas levies no personal income tax, which removes an entire category of planning that matters elsewhere. It does not remove federal tax, and it does not make property tax irrelevant — Williamson County rates are high enough that property tax often exceeds what an income tax would have cost.

The practical effect is that federal bracket management carries all the weight here.

Long tenure at one employer tends to produce a large position in that employer's stock, often accumulated through ESPP and equity grants over many years, and often carrying a very low cost basis. That combination — high concentration, high embedded gain — is what makes it hard to unwind.

There is a specific provision worth knowing about here: net unrealized appreciation. If employer stock sits inside your 401(k), distributing it in-kind at separation can convert the appreciation from ordinary income treatment to long-term capital gains. It is a one-time election, easy to forfeit by rolling everything to an IRA on autopilot.

A 401(k) that has compounded for thirty years is a tax liability that has been growing alongside it. Required Minimum Distributions eventually force income out whether you need it or not, and they can push a retiree into a higher bracket than they occupied while working, while also triggering Medicare IRMAA surcharges.

The window between retiring and RMDs beginning is typically the lowest-income stretch of a person's life. Converting deliberately during that window — filling a bracket rather than crossing it — is usually the highest-value tax move available.

Most of these decisions sit between the investment account and the tax return, which is exactly where advice tends to fall through. We run tax planning inside the investment process rather than beside it, and our CPA is part of the firm rather than a referral.

The firm was founded in Round Rock in 2013, and households here have been part of the practice since the beginning.