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Tax Strategy for High-Income EarnersKeep More of What You Make
Smart tax planning is not about loopholes. It is about structure, timing, and using what the law already allows.
The 2025 tax law ended years of uncertainty: today's individual rates and the 20% QBI deduction are now permanent, the SALT deduction cap has been raised through 2029, and 100% bonus depreciation is back. Most of the rules are stable. The question is whether your plan actually uses them.
37%
Top federal rate, now permanent under the 2025 tax law
20%
QBI deduction on qualified business income, made permanent
$40,400
2026 SALT deduction cap (phases down for incomes above roughly $505K)
$24,500
2026 401(k) employee deferral limit, the starting point, not the ceiling
What Changed in 2025, and What It Means for You
For years, high earners planned around a scheduled "sunset" that would have raised rates in 2026. That sunset never arrived. The One Big Beautiful Bill Act, signed in July 2025, made the current rate structure permanent, kept the larger standard deduction, made the 20% QBI deduction permanent, and raised the SALT cap from $10,000 to $40,000 for 2025 ($40,400 in 2026, with a phase-down for incomes above roughly $505K).
Stable rules change how you plan. Urgency plays are out. Multi-year structure is in: where your income lands, which entity earns it, how much goes into tax-advantaged accounts, and which state gets to tax it. Those decisions compound year after year, and they are made during the year, not at filing time.
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5 Tax Strategies High Earners Are Using Right Now
Roth Conversion Planning
With rates permanent, conversions are no longer a race against a deadline. They are a bracket-management tool: convert in lower-income years, before required distributions begin, or ahead of an expected income jump, so future growth compounds tax-free.
Mega Backdoor Roth 401(k)
If your employer plan allows after-tax contributions and in-plan Roth conversions, total 401(k) contributions can reach $72,000 in 2026 (the all-sources limit if you are under 50), far beyond the standard deferral limit. One of the most effective structures available to W-2 earners.
Charitable Bunching with Donor-Advised Funds
Bundle several years of giving into one year to clear the standard deduction, and fund the DAF with appreciated securities so the embedded capital gain is never taxed. Two 2026 changes make timing matter more: itemized charitable deductions now apply only above a 0.5%-of-AGI floor, and taxpayers in the top bracket get at most 35 cents of benefit per dollar given. Bunching is how you plan around both.
Entity Structure and QBI Optimization
The 20% QBI deduction is permanent, so getting entity choice, reasonable compensation, and income type right pays off every year, not just this one. Pair with a cash balance plan for large deductible retirement contributions.
SALT and State Tax Planning
The higher SALT cap helps many high earners, but it phases down above roughly $505K of income, and the higher cap itself is scheduled to run only through 2029 before reverting to $10,000 in 2030. That makes multi-year timing of state tax payments a real planning lever, and pass-through entity (PTE) elections remain valuable at the top brackets. If you are considering a move, residency and source-income planning still carry six-figure stakes for equity-heavy earners.
The 2026 Planning Checklist
Work through these with your strategist during the year, while each is still adjustable:
Project this year's income and marginal bracket before Q4, not after year-end
Max employee deferrals
$24,500 for 2026, plus $8,000 catch-up if 50 or older, or $11,250 at ages 60 to 63; if your prior-year wages from that employer topped $150,000, catch-up contributions must now go in as Roth
Decide Roth conversion amounts against your projected bracket
Review S corp reasonable compensation and QBI positioning
Time charitable gifts around the new 0.5%-of-AGI floor
Confirm quarterly estimates so April holds no surprises
Meet Jesse Lipscomb
Founder and CEO, Roadmap Tax Services
Enrolled Agent | Series 65 Financial Advisor
Most tax firms file your return and disappear. Jesse built Roadmap Tax to do the opposite. With dual expertise in tax strategy and financial advisory, Jesse works with high-income earners and business owners year-round to find savings their previous CPA never looked for. His clients do not wonder if they are overpaying. They know exactly where their money is going, what strategies are working, and what is coming next. That is what happens when your tax professional actually knows you.
The Team
Your tax advisors
A dedicated team of Enrolled Agents working with you year-round.
Sandy Kisner, EA
Tax Strategist
Sandy focuses on helping entrepreneurs and high-earning professionals reduce their tax burden and build long-term wealth. She works with small business owners, real estate professionals, physicians, investors, and brokers, delivering proactive tax planning tailored to each client. Clients rely on Sandy for clear guidance, creative problem-solving, and practical solutions that turn complex tax laws into real financial opportunities.
Alex Lazo, EA
Tax Strategist
Alex brings nearly five years of experience helping clients take control of their tax outcomes. A Point Loma Nazarene University accounting graduate, he specializes in proactive tax planning for real estate investors and self-employed business owners. Originally from San Diego, Alex is known for making complex tax concepts accessible and actionable, helping clients use the tax code as a tool for building wealth.
Questions?
High-Earner Tax Strategy FAQ
What is the best tax strategy for high-income earners now that rates are permanent?
It depends on your income mix. For W-2 earners, retirement plan design and Roth strategies usually lead. For business owners, entity structure and the QBI deduction typically matter most. A real plan combines three to five strategies built around your situation, and it is executed during the year.
Did the 2025 tax law raise or lower my taxes?
For most high earners it preserved the status quo: the rates you have been paying are now permanent. The biggest changes are the higher SALT cap (with a high-income phase-down), permanent QBI, permanent 100% bonus depreciation, and a new floor on charitable deductions starting in 2026.
Is a Roth conversion still worth it without the sunset deadline?
Often, yes. The case for converting was never only about a deadline. It is about paying tax at a known rate today so growth compounds tax-free. Conversions in lower-income years, or spread over several years to manage brackets, remain a core strategy.
How does the new SALT cap work for high earners?
The cap rose from $10,000 to $40,000 in 2025 and $40,400 in 2026, increasing about 1% per year through 2029, then it is scheduled to revert to $10,000 in 2030. It also phases back toward $10,000 as income exceeds roughly $505K (fully phased down around $600K). Above the phase-down range, pass-through entity elections are still the main way business owners get full value from state tax payments.
Can business owners deduct more than W-2 employees?
Generally yes. Business owners have the QBI deduction, larger retirement plan options such as cash balance plans, and control over how the business pays them. Entity choice significantly affects the total picture.
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