Knowledge Base
Tax optimization frameworks for high-net-worth early retirees — capital gains harvesting, business deductions, and the strategies that move the needle at the $5M+ level.
61 articles in this category — page 5 of 6
Yes, most retirement income is taxable at the federal level, and for high earners the picture is considerably more complicated than the standard guidance suggests. Traditional IRA and 401(k) withdrawals, pension payments, and up to 85% of Social Security benefits all count as ordinary income. Layer
Complex estate planning at the $5M+ level is not a document exercise. It is a coordinated system of trusts, entities, tax elections, and timing decisions that determines how much of your wealth actually transfers to the next generation versus the IRS. Get the structure right, and you control the out
An inherited Roth 401(k) is one of the few assets where the tax benefit genuinely transfers to the beneficiary. Qualified distributions come out entirely tax-free, contributions and earnings alike. But the rules governing *when* and *how* you must take those distributions are specific, deadline-driv
The roth vs 401k question is not really a binary decision at the $5M+ level. It is a tax-rate arbitrage problem across decades, and the optimal split changes depending on your current bracket, your projected RMDs, your state of residence, and whether your plan document allows after-tax contributions
The federal government exempts qualified Roth IRA distributions from income tax entirely. Your state may not. For someone pulling $300,000 to $500,000 annually from a Roth in retirement, the difference between living in Illinois and living in Minnesota can exceed $25,000 per year in state taxes alon
Roth IRA distributions and California taxes follow the same basic federal framework: qualified distributions are tax-free at both the federal and state level. But California's 13.3% top marginal rate, its selective conformity to federal law, and its treatment of Roth conversions create real planning
The short answer: fewer than you'd expect, and the ones that do come with conditions most generic expat guides never mention. The UK, Canada, and Japan have treaty provisions that can protect Roth IRA distributions from local taxation. Australia, Germany, France, and most of the world do not. Where
Yes, capital gains count toward your MAGI for Roth IRA contribution purposes. Every dollar of realized gain, short-term or long-term, flows into the income calculation the IRS uses to determine your eligibility. For 2024, that threshold starts phasing out at $146,000 for single filers and $230,000 f
Yes, you can hold Fundrise investments inside a Roth IRA. The more useful question for anyone with a $5M+ net worth is whether you should, and whether the Roth IRA vehicle itself is even accessible to you through direct contributions. For 2024, the IRS phases out Roth IRA eligibility for married fil
Here is the short answer: Roth IRA contributions do not appear as a line item on Form 1040, and you cannot deduct them. Your IRA custodian reports them to the IRS on Form 5498. But if you earn above the income phase-out thresholds, which most FATFIRE-level earners do, the direct contribution route i
Roth IRA dividends accumulate entirely free of federal income tax, and qualified withdrawals are tax-free as well. That two-part advantage is what separates the Roth from every other account type. But the mechanics matter, and for investors operating at FatFIRE scale, the details around contribution
Holding SCHD in a Roth IRA is one of the cleaner asset location decisions available to high-income investors. The logic is straightforward: SCHD distributes taxable income every quarter, and the Roth IRA eliminates the tax on every dollar of it, permanently. For investors in the top federal bracket,