If my recent post about chasing value stocks or requiring a large sum of money to make money doesn’t resonate, you might want to consider hiring a financial professional to manage your portfolio. Uninstalling the burden of investing can allow your time and energy to focus fully on work, family and hobbies.
Currently, I am going to tax again. Every year, I submit an extension (October 15 deadline) due to K-1 delays in private fund investments. So when Empower reaches out to highlight high-income earners who have wrong tax plans, I agree. This is a topic I know very well.
What I didn’t realize is Authorization Tax plans are provided as part of its standard customer service. No extra invoices, no $300/hour CPA bill. Just the integration advice, including the management fee. Given that taxes are usually the biggest expense for high-income earners, it is great to have a positive strategy.
The importance of tax plans for high-income earners
When you are a high-income earner (think about $250,000 or the potential to get there), you might have a lot of things: investment, real estate, maybe a business or two. What might you have no Pay attention enough? Tax plan.
It’s not as sexy as lunar AI stocks, but the composite effect of smart, consistent tax movements can match the return on investment over time. As authorized personal wealth expert Scott Hipp, CPA, CFP® explains, for high-income, high-net-worth clients, tax plans are not about pursuing taxes that are one-time vulnerabilities, it is about proactive, coordinated, coordinated, annual strategy.
Let’s explore four key questions Scott answered, revealing how much value a smart tax plan can provide. If you are looking for a finance professional to manage your wealth, choosing to integrate your tax plan into their services is essential, rather than add-ons.
Empower has been a long-time member partner of Financial Samurai and I personally consulted personal capital from 2013 to 2015 (later by Empower).
1. Why are tax plans crucial for high-income earners?
Every strategic move increases when you are within the federal tax scope (32%, 35%, or 37%). Saving 1% tax for those who earn $100,000 is nice. Save 1% for those who make $800,000? Those were four first-class tickets in Hawaii, with thousands left.
Scott said most people think the tax plan is an annual battle or search for magic loopholes (“I heard that Uncle Bob paid zero tax because he hired a dog’s employee…”). Fact: The biggest gain comes from small, consistent legal action year after year.
Just like Shawshank Redemption: Stress and Time. Maximizing a health savings account, backdoor Rose’s donations, charitable “bonds” and tax cuts seem to be small, but for 20 years they can carve a serious tunnel for financial freedom.
It’s the danger: by April, most opportunities have disappeared. If you file your 2025 tax in April 2026, the deadline for most of your strategies is December 31, 2025. That’s why Empower’s team works annual– Consultants and tax experts will meet regularly to adjust and optimize before the clock runs out.
2. What are the changes in salt deduction?
After the passage of a Large Bill Act on July 4, 2025, the state and local tax (salt) deduction caps were passed by $40,000 (up from $10,000) on July 4, 2025, up slightly to 2029 each year until recovery in 2030.
Who benefits? Most AGI taxpayers under high tax conditions are taxpayers. AGI reached $600,000 and the extended CAP phase disappeared completely.
But even if you have taxes through delivery business (S-CORP, Partnership, LLC), even earners over $600,000 are not unfortunate, you may use the Pass Entity Tax (PTET). Here, Business Pay state taxes so that they deduct federal taxes completely and you will get a state tax credit. As of 2025, more than 35 states have a PTET option.
For the right customers, the change in salt + PTET unlocks tens of thousands of dollars worth of deductions, which is your portfolio rather than the IRS’ repository.
3. How does authorization deal with complex high-income situations?
Suppose you are a business owner with a lot of investment income, passive rental income and real estate holdings.
and Authorizationyou basically have a “on-demand tax expert” charges – which is no surprise to the bill. The process is:
- Review of returns over the past three years Missed opportunity. (You have three years of modification and claim a refund.) Empower can find thousands of deductions.
- Plan overall according to your goals. Tax strategy is not in a vacuum, it is related to your investment plan, real estate goals and cash flow demand.
Common Opportunities for Self-employed Clients Missed Opportunities:
- No health insurance premiums are deducted.
- Missing qualified business income (QBI) deductions.
- Ignore the Ministry of Home Affairs deductions.
More common error authorization can help catch:
- Capital loss carry loss when switching preparer/software
- Incorrect backdoor Rose handling
- Missed foreign tax credit
- Error cost basis for stock sales (ESPP, options)
- HSA allocation error taxation
From there, Empower expects – also possible to build a solo 401(k), timed income or planned capital gains. The idea is to create an ongoing tax script, not just fix past mistakes.
4. What real-world tax savings do you see?
Missed health insurance deductions are surprisingly common and expensive.
- S-Corp owner: The CPA correctly increases health insurance premiums to W-2 wages (correctly), but never tells the client that they can deduct these premiums above. The three-year return saved about $6,000 in federal taxes.
- Wholly proprietor: Deduction of health insurance is a timetable for deductions, but it cannot benefit from the medical expense threshold and is not listed item by item at all. Modification saves ~$7,500.
- Medicare premium: Many people don’t know that they are eligible to be self-employed health insurance deductions. Grasping this can save $1,000+ per year.
These are not triumphs like open fences, but they can guarantee returns by saving taxes, which is often more complicated over the years.
Uses that key strategies give high-income earners
Scott shared some proactive moves that have emerged time and time again:
Bundle charitable donations
Standard deduction for 2025: $15,750 (single) / $31,500 (married). By combining contributions over two years or more into one tax year, you can go beyond the standard deduction, list item by item, and do the standard deduction in the next year – the total deduction is larger over time.
Bonus: Donate highly appreciated assets or use donor-suggested funds to improve efficiency.
Reap tax losses
Selling the investment at a loss to offset gains elsewhere and then investing in similar (but not “substantially the same”) assets can lower your tax bill for the year while retaining the portfolio. All authorized individual strategic clients ($100K+) minimize your tax burden by actively applying tax cuts and tax locations.
Rose Convert
Move funds from traditional IRAs to Roth IRAs, and if you expect to be in a higher range later, you can lock in today’s tax rates. Future extraction? duty free. This was particularly powerful in low-income years before RMD started.
Save money on a good CPA
A good CPA may only be used for tax advisory fees of $150-$400. At the same time, many people simply don’t offer proactive planning, but focus on compliance and archiving.
Empower builds its tax plan in its overall wealth management service to provide $10,000+ of investable assets for clients. This means:
- One fee, one comprehensive plan.
- Advisors and tax experts in the same room (or zoom) year round.
- Active calls before the deadline – not “See you next April.”
Bottom line
Large investment victory earns headlines, but year after year, quiet, boring, aggressive tax action is just as valuable, sometimes even more. For high-income earners, ignoring tax plans is like Leave a compound on the table.
If you have $100,000 in investable assets, Empower will provide financial warrior readers with Free consultation. Even if you have confidence in your current plan, a second opinion may reveal thousands of missed opportunities.
Only for a limited time Book your free, no-obligation meeting here. Empower Professional will review your investments and net worth and provide some free advice on where you can optimize.
Disclosure: This statement is provided by Kansei Incorporated (the “Promoter”), which has a referral agreement with Empower Advisory Group, LLC (“EAG”). Learn more here.
