Tax Strategies High-Income Earners

Earning more can create greater opportunities, but it can also make tax planning more complex. For high-income earners, planning well is often less about finding one big deduction and more about a handful of decisions made throughout the year, not just in April. The strategies below tend to matter more as income grows, yet they are often the ones that get put off until tax season arrives.

Here are six worth a closer look.

1. Make the Most of Retirement Accounts

For 2026, employees can contribute up to $24,500 to a 401(k), 403(b), or most 457 plans. Those 50 and older can add a catch-up contribution, with a higher limit available for participants ages 60 through 63. One detail is easy to miss. Starting in 2026, workers whose prior year wages from their plan sponsor exceeded $150,000 must direct their catch-up contributions into a Roth account rather than pre-tax. High earners who plan to make catch-up contributions should review their plan’s Roth options and contribution procedures with their plan administrator. This shift is part of a broader move toward Roth becoming the default inside workplace retirement plans, not just individual IRAs.

2. Treat Your HSA as a Long-Term Tool

A health savings account offers a rare combination of tax advantages. Eligible contributions can generally be made on a pre-tax or tax-deductible basis, earnings grow tax-free, and qualified medical withdrawals are tax-free. For 2026, individuals can contribute up to $4,400 and families up to $8,750, with an additional $1,000 catch-up for those 55 and older. Many high earners fund it only enough to cover current expenses. If you can comfortably pay smaller medical costs out of pocket, letting the HSA balance stay invested can give it more time to grow for future healthcare expenses. For a closer look at how to decide whether to participate in an HSA in the first place, see our earlier breakdown of the tradeoffs.

3. Pay Attention to Where Investments Are Held

Different investments generate different kinds of taxable income, including interest, dividends, and capital gains. Holding investments across taxable, tax-deferred, and tax-free accounts creates an opportunity to think about which assets fit best where. Highly tax-efficient investments may make more sense in a taxable account, while those that generate regular taxable income may fit better in a tax-advantaged one. There is no universal formula. The right mix depends on tax bracket, time horizon, liquidity needs, and the overall portfolio.

4. Look for Tax-Loss Harvesting Opportunities

Market volatility can create planning opportunities. Selling an investment that has declined in value and using the loss to offset realized gains is a strategy worth reviewing regularly, not just in December. If losses exceed gains for the year, up to $3,000 of excess net capital losses can generally offset ordinary income, with additional losses carried forward to future years. Investors should also be mindful of wash-sale rules when purchasing the same or a substantially identical investment around the time of the sale.

5. Be Strategic About Charitable Giving

The way a gift is made can matter as much as the amount. Donating appreciated assets held for the appropriate period, rather than cash, can offer different tax results than selling first and donating the proceeds. A donor-advised fund allows a donor to contribute several years of giving at once, which can help move total giving above the itemized deduction threshold in a high-income year while keeping the flexibility to direct funds to charities over time. For those 70 and a half or older, a qualified charitable distribution sent directly from an IRA can satisfy giving goals while keeping the distribution out of taxable income. Starting in 2026, a new rule also limits the itemized charitable deduction to contributions exceeding 0.5 percent of adjusted gross income, which makes the timing and structure of larger gifts even more worth planning for. For more on structuring larger or more complex gifts, see our charitable giving strategies guide.

6. Review Estimated Taxes and the Timing of Income

Bonuses, investment gains, equity compensation, and business income can shift a household’s tax picture significantly during the year. Reviewing projected income and estimated payments midyear, rather than waiting for tax season, leaves more time to adjust withholding or estimated tax payments before year-end. The same applies to income events themselves. A stock transaction, a large bonus, the exercise of equity compensation, or a Roth conversion may offer some flexibility in timing, especially when viewed across more than one tax year.

Tax Planning Works Best as an Ongoing Conversation

Investment strategy, retirement planning, charitable giving, and taxes are usually connected. Reviewing them together throughout the year, rather than only at filing time, makes it easier to catch opportunities while there is still time to act. A short check-in now often does more than a longer one after the fact. Our tax advisory team works alongside your financial advisor to help coordinate these decisions.