How to grow your wealth, not your tax bill

Reduce taxes for high earners is less about finding a magic deduction and more about controlling when you recognize income and where your dollars compound. Two strategies that may move the needle are Roth conversions (pay tax intentionally now for tax-free income later) and a properly designed life insurance retirement plan (LIRP) (for a narrower set of high earners with long time horizons). Both can work, both can backfire, and both require modeling around equity comp, cash flow, and future tax brackets. Last updated: February 18, 2026

I talk with high-earning tech leaders every week. They are progressing fast, earning more, and realizing something uncomfortable. Taxes are often the largest recurring expense in their entire financial life.

The question I hear most is simple: “How can I reduce my taxes?”

The better question is this: “How do I reduce lifetime taxes without breaking my plan, my cash flow, or my ability to make career moves later?”

If you are earning $400,000 to $2,000,000, you typically have limited control over taxes on W-2 wages in the current year. You can optimize around retirement contributions and benefits elections, but your biggest wins usually come from controlling:

• When income hits your return (timing)
• What type of income it is (ordinary vs. capital gains)
• Where assets live (taxable vs. pre-tax vs. Roth)
• How you fund goals (selling the right asset, in the right year, in the right account)

If you want a broader framework for this, read How to Grow Your Wealth, Not Your Tax Bill. It will help you think in systems, not tactics.

It is easy to “save” taxes this year and lose far more later. The common failure mode is optimizing for April instead of optimizing for life.

That is why the strategies below are not presented as hacks. They are presented as planning tools that only work when they fit your timeline, your cash flow, and your equity compensation reality.

A few years ago, many advisors framed Roth conversions as a “use it before the Tax Cuts and Jobs Act (TCJA) sunsets” strategy. That framing has evolved.

As of 2026, the IRS has issued inflation adjustments that incorporate legislative changes from a major 2025 tax bill (often referred to in the media as the “One Big Beautiful Bill”). In other words, tax planning still matters, but you should not build your entire strategy on a single assumption about what Congress will do next. Tax laws can change again.

So what is still true in 2026?

• Roth conversions can still be powerful when you can control your bracket exposure.
• Equity compensation still creates “income stacking” problems that need modeling.
• Tax planning is still a multi-year strategy, not a one-year exercise.

A Roth conversion means moving money from a pre-tax retirement account (like a Traditional IRA, and sometimes a Traditional 401(k) via rollover) into a Roth account. You generally pay ordinary income tax on the amount converted in the year you convert. In exchange, qualified Roth distributions can be tax-free later.

That is the trade. Pay taxes intentionally at a known rate today to potentially reduce taxes later, reduce future required minimum distributions exposure, and increase flexibility in retirement income planning. Whether that trade is worth it depends on your bracket now versus your bracket later. It also depends on cash flow, timing, and coordination with your CPA.

Here is the practical checklist I use with high earners. A Roth conversion may be worth modeling when:

• You have a lower-income year (job change, sabbatical, one-time bonus timing, gap between W-2 roles).
• Your future required distributions could be large, especially if you have built a meaningful pre-tax balance.
• You can pay the conversion tax without disrupting your plan, ideally from taxable cash reserves rather than the retirement account itself.
• You want retirement “tax diversification” so you can pull income from taxable, pre-tax, and Roth buckets depending on the year.

If you are also using Backdoor Roth mechanics, make sure you understand the ecosystem and the paperwork. Start here: All About the Backdoor Roth IRA.

This is where most people get hurt. Conversions can be expensive mistakes when:

• You stack conversion income on top of RSUs and bonuses and accidentally push yourself into a higher bracket than intended.
• You convert too much in a single year without a bracket map, which can create cascading effects across deductions, credits, and surtaxes.
• You do not have cash to pay the tax, forcing you to sell investments in a way that creates more taxable events.
• You assume “rates will definitely be higher later” and convert without modeling the real range of outcomes.

Use this as a fast filter. Then model the real numbers.

Good fit for Roth conversions:
You have a predictable lower-income window. You can “fill a bracket” intentionally. You can pay the tax from cash. You want more tax-free income later.

Poor fit for Roth conversions:
Your income is already stacked from RSUs, bonuses, or a liquidity event. You are cash tight. You are converting based on fear, not a model.

A “LIRP” is usually shorthand for certain permanent life insurance structures that may build cash value over time. In the right scenario, that cash value may be accessed in a tax-advantaged way, subject to eligibility, policy design, funding pattern, and IRS rules.

This is not a blanket recommendation. It is a tool. Like every tool, it can be misused.

If you want the full deep dive, read: Life Insurance Retirement Plans: Turning LIRPs Into Tax-Friendly Income.

A LIRP is not usually step one. It tends to show up later, when:

• You are already maxing retirement plans and still have meaningful surplus cash flow.
• You have a long runway, often 10 to 15+ years, before you expect to rely on the policy for supplemental income.
• You value tax diversification and want another potential lever beyond taxable and retirement accounts.
• You actually need insurance or have a clear reason to own permanent coverage.

• Buying a policy without a clear objective, then realizing the liquidity timeline does not match the goal.
• Underfunding or overfunding improperly, which can reduce efficiency or create tax issues if the policy is not structured correctly.
• Ignoring fees and policy mechanics and treating it like an index fund substitute.
• Failing to coordinate with the rest of the plan, especially RSUs, charitable planning, and retirement cash-flow needs.

If you are a tech high earner, your biggest tax problems usually come from income stacking, not a lack of deductions.

RSUs vest. Bonuses hit. You sell shares. Suddenly your “baseline” income is not your baseline income.

This is why the right move is not “do Roth conversions” or “do a LIRP.” The right move is to build a planning model that shows:

• How much RSU income is likely to hit each year
• How that affects your marginal bracket and any surtaxes
• Whether a conversion can be sized intentionally (or should be skipped)
• Whether a LIRP funding schedule fits your cash flow without creating stress

If you want a legislative planning mindset that is still useful even when laws change, review Your 2025 Tax Playbook: Planning for the End of the TCJA.

• Optimizing in isolation: Doing tax moves without connecting them to goals, cash needs, and equity comp timing.
• Converting “as much as possible”: The goal is often to convert the right amount, not the maximum amount.
• Forgetting the tax payment plan: If you do a conversion, you need a plan for withholding or estimated payments so you are not surprised later.
• Using life insurance as a shortcut: If you do not need it, or the timeline is wrong, it can become an expensive detour.
• No coordination: Your CPA and planner should be aligned. If you are the messenger, mistakes happen.

• Pull your last two tax returns and note your taxable income range and top bracket.
• List the next 12 months of “income spikes”: RSU vesting, bonuses, planned stock sales.
• Write down your current pre-tax retirement balance and Roth balance. If you do not know, that is the first fix.

• Run a preliminary tax projection using your CPA or tax software with and without a Roth conversion amount.
• If you are considering a LIRP, read the deep dive first: Turning LIRPs Into Tax-Friendly Income.

• Build a multi-year view (at least 5 years) that includes RSUs, bonus variability, and major goals.
• Decide on a conversion policy, not a one-off conversion. For example: “Only convert in years where we can stay within bracket X after RSUs.”
• Define what “tax control” means for you. Lower lifetime taxes. Higher after-tax liquidity. Earlier work optionality. Usually it is a blend.

• High earners do not win taxes in April. They win across decades.
• Roth conversions can be powerful, but only when sized intentionally against your bracket and equity comp.
• LIRPs can be useful in narrower scenarios, especially with long horizons and surplus cash flow.
• The biggest mistake is acting without a model that connects taxes, cash flow, and goals.
• Coordination between your planner and CPA is not optional if you want consistent outcomes.

• How to Grow Your Wealth, Not Your Tax Bill: A broader framework for improving after-tax outcomes.
• Life Insurance Retirement Plans: Turning LIRPs Into Tax-Friendly Income: Deeper detail on when LIRPs may fit and how they can go wrong.
• All About the Backdoor Roth IRA: Helpful context if you are building a Roth strategy while income is high.
• Your 2025 Tax Playbook: Planning for the End of the TCJA: A planning mindset for taxes that stays useful even when rules change.

• SmartAsset income tax calculator
• IRS overview of the Tax Cuts and Jobs Act
• David McKnight (author page on Amazon)

If you are earning $400,000 to $2,000,000 and your income is driven by RSUs, bonuses, or business equity, you do not need more tax tips. You need a coordinated system.

At Tailored Wealth, we build an integrated planning model that connects equity compensation, cash flow automation, tax projections, and long-term work optionality. If you want to see what “tax control” looks like when it is tied to a real plan, reach out for a planning conversation and we will map the highest-impact levers for your next 12 to 24 months.

And if you want a quick gut-check first, start by auditing whether you can clearly answer this: “How much of my lifetime income will be taxed at ordinary rates, and what is my plan to change that?”