Tech Executive Saves $265K in Taxes

Tax Planning Results at a Glance

These results reflect this client's specific financial situation and are not typical. Tax savings depend on individual income, filing status, entity structure, investment capacity, and other factors. Past results do not guarantee similar outcomes. This is not tax advice. Consult a qualified professional before making tax planning decisions.

The Situation

Sarah is a 50-year-old enterprise account executive at Salesforce living in California with her spouse. Between her $466,095 W-2 salary and $383,222 in RSUs and other equity compensation, she earned $849,317.

On paper, that is a household income most people would envy. In practice, Sarah felt like she was living paycheck to paycheck.

California's state income tax alone hit $85,137. Federal taxes added another $358,014. Her effective tax rate was 42.2%.

After taxes, housing costs, and the general price tag of living in a high-cost California market, there wasn't much left. Despite earning close to $850,000, Sarah and her spouse weren't able to save at the level they needed. She came to us asking a straightforward question: what do we do about this?

What We Did

We started by looking at everything. Sarah had already done some of the basics right. She was maxing out her 401(k). She had an HSA. But there was a gap in how she was handling her equity compensation. Her RSUs were vesting and being taxed without any real timing approach behind them.

Our primary approach was a tax-efficient business investment paired with equity compensation strategies to better manage the timing and tax treatment of her RSUs. The investment requires Sarah to actively participate for at least 100 hours per year. Meeting that threshold keeps the resulting losses classified as active, not passive, which removes the limitations on what they offset.

We also provided continuous tax planning support with regular check-ins throughout the year, planning around her vesting schedule and projected income.

The investment component required Sarah to put capital to work, but it was structured to generate real returns on top of the tax benefit.

The Results

Sarah's total tax went from $358,014 down to $92,963. She saved $265,051.

Her effective tax rate dropped from 42.2% to 10.9%, a 31.3 percentage point reduction.

After her $61,489 investment and our $30,000 planning fee, Sarah's net savings came to $173,562. Every dollar spent on our fee returned $8.80 in tax savings.

The investment itself is expected to earn an 11% ROI in year one. We modeled a 14.7% IRR on this investment over the next six years, and that figure does not include the tax savings. The tax benefit is on top of the return the business generates on its own.

That's real money back in her pocket every year. Money she is able to save, invest, or use to feel less squeezed in a state that takes a big cut of high earners' income.

What Sarah Had to Say

Key Takeaways