What are the best tax strategies for high-income W2 earners?

For high-income W2 earners, sound tax planning should include:

1. Pre-Tax Contribution Maximization:
   • Contribute to employer-sponsored 401(k)s, HSAs, FSAs, or commuter benefits to lower taxable income.
   • Ensure contributions are sufficient to capture employer-matching benefits.
2. Backdoor Roth IRA Conversions:
   • Use this strategy to build tax-free retirement savings if income exceeds standard Roth IRA limits.
3. Tax-Efficient Investments:
   • Invest in municipal bonds or funds with lower turnover to reduce taxable investment income.
   • Employ tax-loss harvesting to offset gains with investment losses.
4. Charitable Contributions and State Incentives:
   • Donate strategically to lower taxable income while supporting philanthropic goals.
5. Adjust Withholding:
   • Audit W-4 forms to ensure no overpayment throughout the year, increasing cash flow.

These steps, paired with a tax strategist's knowledge, can deliver meaningful savings that are IRS-compliant.