Anonymous
Post 03/06/2026 18:31     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:Over the last few years, we have done well with our HHI but cringe at tax time. Together, we pay close to $150+K in federal taxes. I asked our CPA if there are ways to reduce our taxes, he said as W2 employees, we don't really have many options. He didn't really give us any "outside the box" ideas. We max out our retirement accounts, HYSA. CPA said we can't use home office (we work from home sometimes) as a deduction.

I was curious as to how some folks reduce their tax burden legally...Any ideas, please share.


Unfortunately if most of your income is from W2 (or interest) there simply isn't much you can legally do. Maxing all of your retirement accounts is helpful, but you are already doing that
Anonymous
Post 03/06/2026 18:30     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:Over the last few years, we have done well with our HHI but cringe at tax time. Together, we pay close to $150+K in federal taxes. I asked our CPA if there are ways to reduce our taxes, he said as W2 employees, we don't really have many options. He didn't really give us any "outside the box" ideas. We max out our retirement accounts, HYSA. CPA said we can't use home office (we work from home sometimes) as a deduction.

I was curious as to how some folks reduce their tax burden legally...Any ideas, please share.


He didn’t give you anything outside the box because that would just mean sketchy tax fraud. It’s a real burden on low income people who make enough to pay taxes but it digs into their basic needs. High incomes take what appears to be a huge amount of your money but it’s because your income is huge.
Anonymous
Post 03/06/2026 17:42     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:
Anonymous wrote:Do either of you have access to a deferred comp plan? We put over $60k a year into ours, which reduces taxable income a good deal.

As others said, max your 401k, HSA and FSAs if you have them.


Generally known as a 457 ........... caution though. Deferred compensation still belongs to the employer until you collect it. It's subject to all liabilities that the employer has. You might lose it all.


Could be wrong, but I think 457s are only for government and nonprofit employees. For profit employers have a different version. But yes, deferred comp is still the asset of your employer so you only want to do it if your employer is stable.
Anonymous
Post 03/06/2026 17:14     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:401k
mega back door Roth will avoid taxes over time
HSA
I bonds
Tax efficient investment allocation
529
Flexible spending accounts



We do max out backdoor Roth. Max out HSA. Have 529's. Don't have access to FSA.


But do you max out a 'Mega' Backdoor Roth. It's not the same thing

You can get tax deductions from Rental Properties. Find yourself a different CPA. One that can tell you how big a commercial RE you need to cover your income with the depreciation / interest / expense deductions.
But if you live in the DC area, then FU, pay your damn taxes you whining liberal lol.


Yep I doubt they are maxing a mega back door. Plus their employer’s plan has to allow it.
Anonymous
Post 03/06/2026 16:35     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:
Anonymous wrote:You can have a Schedule C business on the side and if you are on Medicare can apparently deduct some portion of your medicare premium. My accountant tried to do this. I think it's sketchy af for us and said no and gladly paid a couple hundred more in taxes. Ymmv but I felt it was just not what I wanted tomdo.


Under certain circumstances, this is legit; you need to have a Schedule C business that makes money and you need to not have access to insurance as an employee benefit from an employer. The way you said "on the side" when referencing the Schedule C business though ... yeah, it is "sketchy" (or worse) if you have access to an employer subsidized plan. Which makes sense -- the point with the deduction is to subsidize health insurance expenses, and the gov isn't going to do that for people who already have access to subsidized health insurance by way of an employee benefit.

-- a tax professional who has made a living going into court and calling out tax strategies that are, as you put it, "sketchy af"


Thanks for speaking up. My spouse retired midyear ending emoloyee health coverage. He has a little Schedule C. But we use a retiree health plan as supplemental secondary to Medicare AND the former employer still chips in a little each month while we pay most of the premium. This makes it even sketchier based on your explanation.

I think our accountant didn't think about the retiree health plan subsidy.
Anonymous
Post 03/06/2026 15:52     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:Do either of you have access to a deferred comp plan? We put over $60k a year into ours, which reduces taxable income a good deal.

As others said, max your 401k, HSA and FSAs if you have them.


Generally known as a 457 ........... caution though. Deferred compensation still belongs to the employer until you collect it. It's subject to all liabilities that the employer has. You might lose it all.
Anonymous
Post 03/06/2026 15:49     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:
Anonymous wrote:401k
mega back door Roth will avoid taxes over time
HSA
I bonds
Tax efficient investment allocation
529
Flexible spending accounts



We do max out backdoor Roth. Max out HSA. Have 529's. Don't have access to FSA.


But do you max out a 'Mega' Backdoor Roth. It's not the same thing

You can get tax deductions from Rental Properties. Find yourself a different CPA. One that can tell you how big a commercial RE you need to cover your income with the depreciation / interest / expense deductions.
But if you live in the DC area, then FU, pay your damn taxes you whining liberal lol.
Anonymous
Post 03/06/2026 15:20     Subject: For those with high HHI ($500K), tax saving strategies
Real estate...great way to shield some income but you do need enough for it to be legit able to deduce business expenses. We have a few small rental properties so run as much as we can get away with through those (cars mainly but various household supplies too.) No one really gets audited anymore so our accountant plays a little loose.
Anonymous
Post 03/06/2026 15:17     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:Buy some rental properties

This is about the only strategy to offset against w-2 income but you must become a real estate professional in order to really take advantage of it, which requires a significant investment of time, documentation and becoming a landlord.
Anonymous
Post 03/06/2026 14:58     Subject: For those with high HHI ($500K), tax saving strategies
Don't pick up pennies while stepping over dollars.
Anonymous
Post 03/06/2026 14:08     Subject: For those with high HHI ($500K), tax saving strategies
Rental properties like others said but $500K HHI feels low for that with housing prices being what they are? Worth noting $600K was the starting HHI that VA recently tried to increase taxes for, and SALT phases out entirely at $600K. So the government at least is saying “high income” starts around $600K.
Anonymous
Post 03/06/2026 13:13     Subject: For those with high HHI ($500K), tax saving strategies
See tax loss harvesting thread.
Anonymous
Post 03/06/2026 12:51     Subject: Re:For those with high HHI ($500K), tax saving strategies
Talk about first world problems lol my 30% tax rate is twice the median household income in the US whatever can I do about it?
Anonymous
Post 03/06/2026 12:49     Subject: For those with high HHI ($500K), tax saving strategies
Create a tax shelter...a church, not for profit, rental properties...
Anonymous
Post 03/06/2026 12:49     Subject: For those with high HHI ($500K), tax saving strategies
Anonymous wrote:401k
mega back door Roth will avoid taxes over time
HSA
I bonds
Tax efficient investment allocation
529
Flexible spending accounts


THis is good advice, and some that you may not get from a CPA because they are not investment experts. I'd also add in tax loss harvestig - -there are automated investment options (we use Wealthfront) that do this automatically.

We have some money with a financial advisor and they aim to reduce taxes now (typically divident payments) but choosing investment vehicles that shield us from that. Better to take such gains down the road when our income is lower (retired) and we'd be in a lower tax bracket.