It's been nearly a month since the Federal Reserve kicked off its rate-cutting cycle. While lower interest rates can lead to reduced borrowing costs and increased consumer spending, they may also come with challenges that affect tax liabilities and financial strategies.

BNY Pennsylvania chairman and Midwest regional president Eric Boughner joins Wealth! to discuss how the Fed's rate cuts could impact your taxes.

Boughner encourages working with tax and financial advisers to come up with a plan ahead of tax season and ensure you're on track to meet your financial goals. As the Fed continues to ease interest rates, he advises, "You have to look at all of your tax liabilities and your estate planning activities plus your investment portfolio and figure out which ones are tied to interest rates and which ones have some impact."

He explains that by looking at your overall asset allocation, you may find areas generating additional taxable gains. "So less taxable interest income equals less taxes overall is what we're trying to emphasize with our clients," Boughner adds.

The IRS has announced tax relief for individuals and businesses affected by Hurricane Helene, extending the deadline to May 1 to file most of these tax returns. Boughner encourages these individuals to start planning early for the taxes, especially as the Tax Cuts and Jobs Act will expire at the end of 2025.

"We kind of prepare for the worst situation. That begins [with] not waiting until year-end, not waiting until the beginning part of next year, to get affairs in order and to be prepared to do that such that if there are delays and or extensions that are granted that everyone is aware of them and is prepared to move ahead appropriately," he tells Yahoo Finance.

To watch more expert insights and analysis on the latest market action, check out more Wealth! here.

This post was written by Melanie Riehl