Tax Planning Strategies High Earners Should Consider

Let's explore some of the key tax deductions and strategies that can help reduce your tax burden as a high earner and support your long-term financial goals. 

Reduce Taxable Income by Maximizing Retirement Account Contributions 

One of the most powerful tax-reduction strategies available to high earners is maximizing contributions to retirement accounts. For 2025, you can contribute: 

• Up to $23,500 to your 401(k), 403(b), or 457 plan 
• An additional $7,500 if you're age 50 or older 
• Special catch-up contributions of $11,250 for those aged 60-63 only  
• Up to $7,000 to a traditional IRA ($8,000 if age 50 or older) 

Remember that traditional retirement account contributions reduce your taxable income dollar-for-dollar. For business owners, consider establishing a SEP IRA or Solo 401(k) which can allow for even higher contribution limits. 

Strategic Charitable Giving 

Charitable contributions remain one of the most impactful tax deductions available. Consider these approaches: 

• Qualified Charitable Distributions (QCDs) from IRAs if you're over 70½ 
• Donor-Advised Funds to bunch multiple years of charitable giving 
• Gifting appreciated securities to avoid capital gains taxes 
• Creating charitable trusts for larger planned giving strategies 

For 2025, you can contribute up to $105,000 through QCDs, offering significant tax savings while supporting causes you care about. 

Leveraging Real Estate Deductions 

Property ownership provides several tax advantages: 

• Mortgage interest deductions up to $750,000 of qualified residence debt 
• Property tax deductions (subject to SALT limitations) 
• Depreciation deductions for investment properties 
• Home office deductions for qualifying business use 

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Health Savings Accounts (HSAs): Triple Tax Advantage  

If you have a qualifying high-deductible health plan, HSAs offer unique benefits: 

• Tax-deductible contributions 
• Tax-free growth 
• Tax-free withdrawals for qualified medical expenses 

For 2025, families can contribute up to $8,300 ($9,300 if age 55 or older), providing both immediate tax savings and long-term healthcare funding. 

Business Owner Tax Strategies 

Business owners have additional opportunities including: 

• Section 179 expensing for equipment purchases 
• Home office deductions 
• Business vehicle expenses 
• Professional development and education costs 
• Employee benefit programs 

Investment Tax Strategies 

Consider these investment-related tax strategies: 

• Tax-loss harvesting to offset gains 
• Municipal bonds for tax-free income 
• Qualified Opportunity Zones for capital gains deferral
• Structured sale strategies for business exits 

Beyond Taxes: Reap The Value of High Net Worth Financial Planning  

While these deductions and strategies can significantly reduce your tax burden, it's essential to implement them as part of a comprehensive financial plan that's tailored for your specific situation as a high net worth individual.  

Through our Plan Well. Invest Well. Live Well.™ process, we help ensure your tax strategy aligns with your broader financial goals. This comprehensive approach and our long-term client relationships are what helps us to achieve our goal of providing you with "Absolute Confidence. Unwavering Partnership. For Life." 

Ready to optimize your tax strategy for 2025 and create a strategic, long-term financial strategy to build and maintain your wealth? Schedule a complimentary discovery session on our website at whzwealth.com or call us at (860) 928-2341. Our experienced team will work with you to create a personalized plan that maximizes available tax advantages while supporting your long-term financial success. 

Presented by Associate Vice President, Wealth Advisor Jonathan Mathews. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. www.whzwealth.com.