By Holly Clapp
If your household income comfortably exceeds six figures, you already know the tax code wasn’t written with sympathy for success. Yet most affluent couples still leave five- and six-figure opportunities on the table each decade simply because they aren’t optimizing the tools that already exist. Below are four strategies worth exploring before the next filing season.
1. Maximize—and sometimes supersize—retirement contributions. For 2025 you can defer up to $23,500 into a 401(k) or 403(b), plus a $7,500 catch-up if you’re 50 or older; those aged 60-63 may qualify for an $11,250 “super” catch-up. Dual-income couples who also own side businesses can layer on a solo-401(k) or cash-balance plan, can maximize total tax-deductible savings.
2. Use today’s bracket to fund tomorrow’s Roth dollars. With the 2017 tax cuts set to potentially sunset after 2025 (legislation is pending as we speak, however), current brackets may be the lowest you’ll see for some time. Subject to ordinary income now, Roth conversions, done in manageable amounts, that fill the 24 % or 32 % bracket each year can help reduce required minimum distributions down the road and build tax-free income.
3. Give where it matters, deduct when it counts. A donor-advised fund lets you front-load several years of charitable gifts in a single high-income year, harvesting a large deduction now while granting dollars to favorite causes later. If you’re 70½ or older, qualified charitable distributions (QCDs) let you send up to $108,000 directly from an IRA to charity in 2025, satisfying RMDs and keeping the income off your 1040.
4. Turn concentrated gains into diversified generosity. Highly appreciated stock or a low-basis business interest can trigger a hefty capital-gain bill. Contributing part of that position to a charitable remainder trust or charitable LLC may spread taxes over years, generate an immediate deduction, and provide a lifetime income stream to you before ultimately benefiting charity.
Bonus tip: Don’t ignore the humble Health Savings Account. Max-funding an HSA ($8,550 family limit in 2025) offers a rare “triple tax-free” benefit—deductible going in, tax-free growth, and tax-free withdrawals for qualified medical expenses.
Your Next Move
The best tax plan is personal, proactive, and done before December 31. If your 2025 income is tracking higher than expected, let’s run a mid-year projection and identify which of these ideas could keep more of your success compounding for your family—and for the causes you care about. Let us help you explore these and other ideas, along side a qualified tax professional.
If you need an introduction to a good tax advisor, please leverage me for a referral.
This material is for educational purposes only. The views expressed are those of the author.Holly Carroccio is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. www.SIPC.org. Nexus Advisors, LLC is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. OSJ address: 14241 Dallas Parkway, Suite 1200, Dallas, TX 75254; 972.348.6300. Neither MML Investors Services, LLC nor any of its subsidiaries, employees or representatives are authorized to give legal or tax advice. Consult your own personal attorney legal or tax counsel for advice on specific legal and tax matters. CRN202810-XXXXXX