Tax Strategies for High-Income Earners

Tax Strategies for High-Income Earners

Maximize Retirement Contributions

• 401(k): Max out at $23,500 (2025)
• If self-employed: Solo 401(k) or SEP-IRA (much higher limits)
• Backdoor Roth IRA: Contribute even above income limits
• Mega Backdoor Roth: After-tax 401(k) contributions

Donor-Advised Funds (DAFs)

• Contribute appreciated assets to a DAF
• Take the full deduction this year
• Distribute to charities over multiple years
• Avoid capital gains tax on appreciated assets

Tax-Loss Harvesting

• Systematically sell losing positions to offset gains
• Can harvest up to $3,000 to offset ordinary income

Qualified Opportunity Zones (QOZ)

• Defer and potentially exclude capital gains
• Must invest in designated opportunity zones within 180 days

Charitable Remainder Trusts (CRT)

• Transfer appreciated assets to a CRT
• Receive an income stream for life
• Charitable deduction in year of transfer
• Avoid immediate capital gains

Oil and Gas Investments

• Intangible drilling costs (IDCs) often immediately deductible
• Depletion allowances reduce ongoing income

Real Estate Professional Status

• If you qualify, can deduct unlimited real estate losses against ordinary income

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