For high-income earners, taxes involve more than filing on time and claiming common deductions. With wages, equity compensation, investment income, and business ownership in the mix, all your financial planning choices come with higher stakes. The passage of OBBBA on July 4, 2025, added another layer, changing deductions and benefits that affect both individuals and businesses. Strategic tax planning allows you to manage these moving parts with confidence and avoid surprises when tax season arrives.
Start With a Multi-Year Projection
Tax planning begins with a forward-looking projection. Using your most recent return as a baseline, you can model income, deductions, and timing choices for the next two or three years. A sound tax projection includes more than wages; it also accounts for equity vesting, partnership income, and capital gains you may be planning. Seeing your numbers laid out helps you understand how new thresholds, phaseouts, and deduction limits under OBBBA will affect you.
Income Shifting With Guardrails
Some high earners benefit from income-shifting strategies, but these need to be handled with care. Paying family members for legitimate work at a fair rate is one option. Business owners may also explore compensation adjustments that balance salary and distributions. Trust structures can shift income, too, though they require clear purposes, distribution policies, and ongoing compliance. Without proper oversight, these tools can create problems instead of savings.
Tax-Efficient Investments and Asset Location
Investment planning plays a major role in reducing taxes over time. Income-heavy assets, such as taxable bonds or real estate investment trusts, often make sense in tax-deferred accounts, while broad index funds with lower turnover can remain in taxable accounts. Coordinating capital gains harvesting or deferral with your tax bracket helps smooth liabilities. Business owners may also benefit from immediate expensing of technology, equipment, or infrastructure purchases. Municipal bonds remain an option when your marginal rate is high enough to make their tax-exempt yield attractive.
Charitable Giving and Trust Strategies
Charitable planning can reduce current tax liability while supporting causes you care about. Donor-advised funds allow you to claim an immediate deduction and then grant money to charities on your own timeline. Charitable remainder or lead trusts can help manage appreciated assets, spread income over time, and provide a legacy benefit. Combining these strategies with gifts of appreciated stock can further increase your deduction value and align your giving with your long-term goals.
SALT, Itemized Deductions, and Surtaxes
High-income taxpayers in states with significant local taxes need to plan around the SALT cap. Deciding whether to itemize or take the standard deduction depends on your total picture, including charitable giving and mortgage interest. You also need to factor in the net investment income tax and the Additional Medicare Tax, which adds complexity when managing capital gains or planning large liquidity events.
Key Points to Discuss With Your CPA
- Update your projection if you receive a bonus, equity vesting, or capital gains.
- Review withholding and estimated payments so they align with safe-harbor requirements.
- Revisit asset location and tax-lot strategies across taxable, tax-deferred, and Roth accounts.
- The timing of charitable gifts of appreciated stock or other assets to maximize benefit.
- Evaluate expensing options for business purchases such as equipment or technology, keeping depreciation strategy in mind.
- Refresh estate documents and trust funding as needed.
FAQs
Do these strategies reduce taxes every year?
Not always. Some moves shift the timing of income or deductions, while others lower taxable income or manage risk. A projection can show what is most effective in your situation.
Are charitable trusts only for ultra-high-net-worth families?
No. They may work well for anyone with appreciated assets, philanthropy goals, and income planning needs. The decision depends on your numbers and your objectives.
When should I consider municipal bonds?
They may be worth considering if your marginal tax rate is high. A CPA can calculate the tax-equivalent yield compared to taxable alternatives.
Schedule a Strategic Review to Get Ahead on Tax Planning
Tax planning becomes more important as your income and financial complexity grow. By looking beyond this year's return, you can reduce surprises, make better investment choices, and align charitable giving with your goals. At Myrick CPA, we work with high-income clients in Washington, D.C., and across the country to build personalized strategies under today's tax laws.
If you want clarity on how OBBBA and other recent changes will affect your tax planning this year, schedule a consultation today. A clear plan and the right guidance provides peace of mind now and in the years ahead.
