Income crossed a threshold. The IRS automatically starts following each dollar earned.
Today’s high-income earners in the US — tech founders, law firms, physicians, real estators, private equity professionals, and e-commerce entrepreneurs — cannot be categorized into one profile. We are aware that they are watching the hour-shifting news both in politics & economics. One single decision change of Washington has the potential to impact all positions overnight.
Yet, one thing doesn’t change for high earners: taxes remain. No matter if the news cycle is calm or catastrophic, whether markets are rewarding risk or punishing it, high earners absorb a share of the federal tax burden.
The highest-earning clients we work with at Dimov Tax don’t accept their April bill as the final word. They deploy smart, legal strategies to shrink their taxable footprint on a yearly basis. We present the top 10 strategies embraced by our high-earning profile clients today.
Tax Brackets First
It’s well known that the US tax system is progressive. Only the income sitting on each rung of the ladder gets taxed at that rate. High earners don’t directly pay 37% on everything just because the top dollar is above.
The 37% ceiling is only applicable above USD 626,350 — single or USD 751,600 — joint.
Top 10 Strategies
1. Max Out Retirement Accounts — Before Anything
Every pre-tax dollar pushed into a 401(k) or IRA lowers the taxable income. At a 37% marginal rate — that’s an immediate — guaranteed 37-cent return before the investments do a single thing.
| Account | Under 50 | Age 50+ |
| 401(k) | USD 23,500 | USD 31,000 |
| IRA | USD 7,000 | USD 8,000 |
| SEP-IRA | 25% of comp or USD 70,000 | Same |
In case of being self-employed, a solo 401(k) or defined benefit pension plan has the potential to shelter way more. Never leave an employer match unclaimed — that’s free money you’re handed back.
2. Fund the HSA to the ceiling
For 2025, the HSA contribution limits are:
- USD 4,300 for self-only coverage
- USD 8,550 for family coverage
- An additional USD 1,000 catch-up is available for +55 and not yet enrolled in Medicare
Most high earners treat this account like a reimbursement fund. Wrong instinct. After 65, HSA funds have the potential to cover any expense at all — not just medical — which makes it a “stealth second retirement account” running alongside the 401(k). Invest the balance. Don’t let it sit in cash earning nothing while the tax advantage goes to waste.
3. Use tax-deferred investments strategically
Tax deferral is simple math. Money that isn’t taxed annually compounds faster. Annuities and 529 plans are the two vehicles most high earners overlook after maxing qualified accounts.
The withdrawal sequence in retirement matters as much as the accumulation. A CPA-designed drawdown plan — Roth, taxable, traditional, in the right order — can save tens of thousands over a decade.
4. Claim every tax credit you qualify for
Deductions lower taxable income and credits lower the actual tax amount owed. Energy-efficient home improvements — solar panels, heat pumps, insulation — qualify in parallel to the current law. Map your eligible spending before year-end — not in April.
5. Give charitably — and do it smarter
Two moves most donors miss:
- Donating appreciated stock instead of cash — you skip capital gains and claim the full market value as a deduction
- Bundle multiple years of giving into one tax year to clear the standard deduction threshold
A Donor-Advised Fund handles both elegantly — contribute now, distribute to charities on your own timeline.
6. Invest in real estate & leverage aggressive depreciation
Depreciation enables you to collect rent, generate cash flow, and still present a paper loss that offsets other income. Mortgage interest on investment properties is deductible. And a 1031 exchange lets you roll profits from one property sale into a larger one without triggering capital gains tax in the process. Defer taxes. Build empires.
Keep accurate records of every improvement and expense. The deductions are only as good as the documentation behind them.
7. Maximize business deductions in case of owning an establishment
Business ownership is a tax planning vehicle in its own right. The QBI deduction alone enables pass-through business owners to deduct up to 20% of qualified business income. Section 179 & bonus depreciation let you write off equipment in full the year you buy it.
8. Capital gains management— don’t let them just happen
Short-term gains (under one year) are taxed as ordinary income — up to 37%. Long-term gains drop to 15% or 20%. That gap on a USD 100k gain is USD 17k. Timing an asset sale by even one day can be the distinction.
Tax-loss harvesting before year-end offsets realized gains with realized losses. And don’t forget the 3.8% Net Investment Income Tax that hits high earners above USD 200k — single or USD 250k – joint — the effective rate is likely higher than expected.
9. Planning with state and local taxes
Federal taxes get the headlines. California’s 13.3% and New York City’s combined 14%+ rates have the potential to quietly rival them. Florida, Texas, and Nevada charge 0 state income tax.
Relocating before a major liquidity event — business sale, large stock option exercise — can generate substantial savings. But residency isn’t changed by updating a mailing address. States like California aggressively audit high earners who claim to have left.
Do it right or don’t do it at all.
10. Advanced structures for wealth
Family Limited Partnerships, irrevocable trusts — SLATs, GRATs, CRTs and tax-advantaged life insurance exist for high earners with complicated estate planning needs.
Done correctly, they transfer millions across generations at a fraction of the tax cost. Done poorly, they generate penalties and IRS scrutiny.
None of these are DIY projects. This is where the correct CPA pays for itself many times over.
Dimov Tax presents expert support to high earners.
The anxiety in every April isn’t inevitable. It’s a sign your tax planning is reactive — not deliberate.
Dimov Tax assists high-income earners, business owners, and real estate investors who are tired of large checks without recognizing why. With over 70+ dedicated tax services, our professionals are here to support you.Ready to stop overpaying? Contact Dimov Tax to schedule a consultation.