565: Tax Strategies for High Earners—And What to Avoid
About this episode
This episode discusses tax strategies for high earners and highlights what to avoid to minimize IRS scrutiny.
One of the biggest frustrations I hear from successful professionals, business owners, and investors is simple: "I feel like I'm paying more and more in taxes, but nobody is showing me legitimate ways to reduce them." The reality is that there are numerous tax strategies available to high earners. The challenge is separating strategies grounded in well-established tax principles from those that rely heavily on subjective interpretations, aggressive valuations, or structures that may attract unwanted IRS scrutiny. Personally, I prefer strategies that are as black-and-white as possible when it comes to the tax code. Over the years on Wealth Formula, we've discussed many of these approaches, including cost segregation studies, bonus depreciation, real estate professional status, retirement plan strategies, charitable planning, and other opportunities available to high-income earners. What I generally try to avoid are strategies that rely heavily on subjective valuations or interpretations. A good example is the conservation easement space, where the IRS has significantly increased enforcement activity in recent years. Whether certain transactions were originally well-intentioned or…
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