High-Income Professionals

Tax Planning forHigh Earners Who Want More

Advanced tax strategies for attorneys, physicians, tech executives, and other high-income W-2 professionals who are tired of writing six-figure checks to the IRS.

Find Strategies That Fit Your Situation

The Problem

The High-Income Tax Trap

Earning a high W-2 salary is great—until April arrives. High-income professionals face a brutal tax reality.

Limited Deductions

W-2 employees have few write-offs. No business expenses, no retirement plan flexibility, no depreciation. Your taxable income is basically your gross income.

Bracket Creep

At $400K+, you're paying 35-37% federal plus state taxes plus the 3.8% Net Investment Income Tax. Nearly half your raises disappear.

Passive Loss Limitations

You've heard real estate can reduce taxes, but passive activity rules block most W-2 earners from using those losses.

SALT Cap Pain

The $10,000 state and local tax deduction cap hits high earners in states like California, New York, and Ohio hard.

Excess Business Loss Limits

Section 461(l) caps business losses at $313,000 single / $626,000 married (2025), limiting aggressive loss strategies.

37%+

Top Federal Rate + NIIT

Our Approach

Legal Strategies That Actually Work

We identify the right combination of tax-advantaged investments, real estate strategies, and income planning for your specific situation.

Real Estate Tax Strategies

Short-Term Rental Loophole

Properties with average stays under 7 days aren't subject to passive activity rules. Losses can offset W-2 income directly.

Real Estate Professional Status

For spouses not working full-time, qualifying as a Real Estate Professional unlocks unlimited passive loss deductions against household income.

Cost Segregation + Bonus Depreciation

Accelerate depreciation on rental properties to generate large paper losses in year one.

Active Participation

Even without REPS, you can deduct up to $25,000 in rental losses if you actively participate (phases out above $150K AGI, but strategies exist).

Investment-Based Tax Planning

Oil & Gas Working Interests

Intangible drilling costs (IDCs) are immediately deductible and aren't subject to passive loss rules. Offset W-2 income dollar-for-dollar.

Conservation Easements

Donate development rights on qualified land for deductions potentially exceeding your investment. IRS scrutiny is high—proper structure is critical.

Qualified Opportunity Zone Funds

Defer capital gains and potentially eliminate tax on appreciation with 10+ year holds.

Tax-Efficient Asset Location

Place tax-inefficient investments (bonds, REITs) in retirement accounts; growth stocks in taxable accounts.

Business Ownership Planning

Leverage + Depreciation

Finance equipment that cash flows from day one. The business covers the debt service while you claim 100% bonus depreciation on the full purchase price—creating paper losses that offset W-2 income.

Material Participation

Meet the 100-hour test (participate at least 100 hours annually and more than any other individual) to treat the activity as non-passive. Your losses then offset active income directly.

Asset Classes That Work

Car washes, crypto mining, laundromats, self-storage, equipment leasing—businesses where the equipment does the work and financing is readily available.

Cash Flow Positive, Tax Loss Negative

The math works because depreciation is a non-cash expense. You pocket the operating income while the depreciation deduction shelters your W-2.

Charitable Strategies

Donor-Advised Funds
Bunch multiple years of giving into one year to exceed the standard deduction threshold. Get the deduction now, distribute to charities over time.
Appreciated Stock Donations
Donate stock instead of cash to avoid capital gains and still get the full fair market value deduction.
Charitable Remainder Trusts
Convert highly appreciated assets into lifetime income while getting an immediate deduction.

Income Timing & Structure

Backdoor Roth Conversions
High earners can still fund Roth IRAs through the backdoor strategy—no income limits apply.
Deferred Compensation Planning
If available, defer income to lower-tax years (retirement, relocation, sabbatical).
Multi-Year Tax Projections
Plan stock option exercises, bonuses, and large transactions across tax years to minimize bracket exposure.

By The Numbers

Key Statistics

100%

Bonus depreciation (2026)

60-80%

Oil & gas IDCs deductible year one

$313K

Section 461(l) limit (single, 2025)

100 hrs

Material participation test threshold

FAQ

Common Questions

Properties with an average guest stay of 7 days or less are not considered "rental activities" under passive activity rules. This means losses from these properties can offset your W-2 income without needing Real Estate Professional Status. Combined with cost segregation and bonus depreciation, you can generate significant paper losses in year one.

To avoid passive loss limitations, you can materially participate in a business by working at least 100 hours during the year AND more hours than any other individual. This is often achievable for investor-owned businesses like car washes or laundromats where you handle management decisions, vendor relationships, and financial oversight.

Oil & gas working interests offer immediate deductions (60-80% of investment in year one) that offset W-2 income dollar-for-dollar. However, they carry real economic risk. We recommend these only as part of a diversified tax strategy, with proper due diligence on the operator and economics of the wells.

It depends on your income and which strategies fit your situation. A combination of short-term rentals, business ownership, and charitable planning can reduce effective tax rates by 10-15 percentage points or more. We model scenarios specific to your situation before recommending any strategy.

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