Income tax strategies

Targeted Income Tax Strategies for $1M+ W2 Earners in California

You’ve worked hard to reach this level of compensation — but standard approaches weren’t built for the complexity of W2 income, bonuses, and equity packages in California.

Here are proven strategies that high earners in your position are actively using.

Advanced strategies

These deliver immediate net cash benefit. Tax savings are always greater than implemenation costs.

Foundational strategies

These reduce specific W2 exposures through targeted investment and deferral. Most require capital commitment.

Financing Deductions

Advanced Strategy

Generate a large current-year charitable deduction while keeping your cash flow intact and supporting causes you care about.

In strong income years, this approach can produce significant tax savings that more than offset the implementation cost.

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Modeled at $1.5M household income

Tax savings ~$415K

Net cash position +$190K

Benefit timing Current year

Equity Compensation Planning

Advanced Strategy

Advanced planning for significant equity compensation grants (RSUs, ISOs, NSOs, restricted stock).

Standard vesting and exercise timing often leaves substantial tax exposure on the table. Thoughtful multi-year sequencing, coordination across grant types, and alignment with liquidity events can materially improve outcomes.

This is highly individualized work — every situation is different.

See details → Request specialist introduction →

Modeled at $20M equity gain

Federal tax reduction ~$2M

Effective federal rate 20% → 10%

Planning window Pre-liquidity event

Foundational strategies

Each strategy addresses a distinct element of W2 tax exposure. Most require capital commitment. The tax benefit follows directly from the investment decision.

401(k) & Deferred Compensation

Pre-tax deferral of salary and bonus. Immediately lowers your taxable income. Particularly powerful for large bonuses.

Backdoor Roth / Mega Backdoor Roth

Restores your ability to grow money tax-free even when your income exceeds normal Roth limits.

Section 83(b) Election

Locks in tax at the grant-date value on restricted stock. Can dramatically increase future after-tax wealth if filed correctly within 30 days.

Donor-Advised Fund

Allows you to bunch charitable giving into a high-income year to maximize your deduction when it matters most.

Short-Term Rental

Generates deductible losses that can offset W2 income (note: California rules differ from federal).