Top 10 Tax optimization Strategies for high earners
1. Review your tax bracket and consider ways to lower your taxable income.
2. Invest in tax–advantaged accounts such as a 401(k) or IRA.
3. Defer income to lower your tax bill in the current year.
4. Take advantage of tax–loss harvesting. This itself is a big topic and deserves a separate full article, which we will discuss in subsequent blogs.
5. Use business deductions to lower your taxable income.
6. Utilize tax–advantaged investments such as municipal bonds. Look at investing in tax free Municipal bonds, or funds, which are specific to your domicile state.
7. Consider a tax–efficient investment strategy.
8. Review your withholdings and make changes if necessary.
9. Stay up–to–date on tax law changes. With current inflationary environment, and lot of new bills introduced there is always opportunity to optimize deductions.
10. Work with a tax professional to ensure you are taking advantage of all available tax breaks.
11. If you are running some business or side gig, thing of optimizing the earned income through business using the LLC or other structures which gives you more flexibility.
12. Invest in yourself by upgrading your skills or getting more education, that can be offset from current income.
Useful Resources on this topic