Tax planning is particularly complicated for high-wage earners. Texas is home to many high income earners who may have particular financial concerns such as dealing with multiple incomes, maximizing tax deductions and preparation for long-term wealth retention. In order to keep pace, these professionals shop around for professional tax saving experts in Texas to help develop a customized plan to reduce the amount of taxes owed, without incurring penalties or breaking any state and federal tax laws.
And while there’s no personal income tax in Texas, high income individuals are not off the hook for federal tax: As of 2025 the top marginal rate is 37%. There are also other levels of taxation with 3.8% for the Net Investment Income Tax (NIIT) and an Additional Medicare Tax of 0.9% on wages over $200,000 for individuals and $250,000 for married couples. These fees can add up, even quickly, particularly if you are a professional, small business owner or investor. Tax planning should not be seen as a once-a-year activity, but as an ongoing strategy that is incorporated into your overall financial goals.
One great option is making the most of retirement contributions. High-earners often take advantage of tax-deferred models for savings such as 401(k)s, IRAs, and SEP IRAs. For example, the 2025 limit on contributions for a 401(k) is $23,000, or $30,500 if you are over 50. SEP IRAs allow for even more — up 25% of income or $69,000, whichever is smaller. When used properly, these accounts can enable taxpayers to defer income as well as lower their tax bill for the current year.
Another great strategy is tax diversification. That means spreading assets among taxable, tax-deferred and tax-exempt accounts. Roth IRAs are funded with after-tax dollars, but the withdrawals are tax free at retirement so if you expect to be in the same or higher tax bracket later, they’re the better longer term bet. In other cases, it may be recommended by tax saving consultants in Texas to utilize a Roth conversion strategy to help even taxable income over multiple years, when income is temporarily reduced.
Investment strategy also matters when it comes to tax efficiency. Wealthy individuals may make good use of so-called tax-loss harvesting, selling losing assets to offset gains — and shrink overall tax exposure. You might also consider investing in tax-efficient funds or municipal bonds to lower taxable income. Full-time residents of the Lone Star State may want to capitalize on the fact that Texas municipal bonds are tax-exempt for both federal and state purposes.
Donating to charities is one of the most personally significant, practical ways to further limit your taxable income. Donor-advised funds (DAFs) and charitable remainder trusts (CRTs) permit taxpayers to donate substantially, take immediate tax benefits and then parcel the funds out to charity over time. These are particularly attractive for those in higher brackets that are looking to make a serious dent on their wealth while also positively adjusting their tax situation.
High-income earners with business income may also be able to utilize further income splitting techniques and restructuring of their entities to reduce their effective tax rate. For example, organizing as an S Corporation can cut down on self-employment taxes over a sole proprietorship. Section 199A’s 20% pass-through deduction for Qualified Business Income (QBI) can produce significant savings if structured appropriately as well. These are the things that need the most time to plan and are generally what tax saving consultants in Texas are specialized in analyzing to make sure that the actions are not only legal, but also very advantageous.
There is another big one: Estate planning. With the federal estate tax exemption currently at $13.61 million per individual in 2025, wealthy individuals need to employ strategies to shield and pass on wealth in a tax-friendly way. Creative strategies like gifting, creating irrevocable trusts or utilizing family limited partnerships (FLP) could both lower your estate taxes and insulate assets for future generations of family members to enjoy.
Last, but not least, timing is incredibly important in tax planning. Timing, and the timing of income realization and expense recognition, and how transactions are entered into makes a huge difference. For instance, delaying year-end bonus until the following year can affect current tax liability; or you may want to make use of deductible expenses to make an earlier payment. Look, these decisions are not sexy, but they can make a big difference when done correctly.
In short, the rich have many ways to pay lower taxes that are perfectly legal. “Now that our revenue streams are getting on the more complicated side, individualized planning is more important than ever. By collaborating with a trusted tax saving consultant in Texas, you are protecting your financial future while taking advantage of every legal way to minimize your tax obligations.
