A Smarter Way to Save: Tax-Efficient Strategies for Professionals

Tax Planning
Retirement Planning
Charitable Giving

When you're at the top of your game, whether you're a partner in a law firm, a physician in private practice, or a management consultant, your tax landscape may be inherently complex. You might be juggling self-employment taxes, estimated tax payments, and alternative minimum income taxes, all while trying to retain as much of your income as possible during your peak earning years. That’s why smart tax planning is not optional; it’s essential. Here are some strategies for how top earners can maximize their take-home pay and build lasting wealth.

Retirement Savings with High-Limit Plans

You may already know about the 401(k), but the real boost comes from leaning into advanced vehicles:

Cash Balance Plans
This hybrid pension/401(k) lets high earners contribute substantial pre-tax dollars. In 2025, the maximum accumulated value can reach approximately $3.6 million for someone age 62, and up to $3.8 million for someone working until age 68 ¹ Often paired with 401(k)s, they can enable savings of $350,000–$400,000 per year when properly structured. These plans are increasingly favored by professionals across medicine, law, and consulting. ² ³
401(k) + Mega Backdoor Roth
The 2025 401(k) limit allows up to $23,500 in employee deferrals, with catch-up contributions (for those over age 50) of up to $7,500, and higher “super” catch-ups (for those aged 60–63) of up to $11,250. With a mega backdoor Roth, you can push after-tax contributions into the 401(k) well beyond deferral limits. The maximum contribution for 2025, including mega backdoor Roth contributions, is $70,000 for individuals under age 50 and $77,500 for those 50 or older, earmarking future growth as tax-free wealth. ⁴ ⁵
SEP IRA
Side income from consulting, expert witness work, or board service can potentially be sheltered in a SEP IRA, where you can contribute up to 25% of net earnings from self-employment, capped at the annual limit. For example, a physician who earns $100,000 annually from expert witness testimony could potentially contribute $25,000 pre-tax into a SEP IRA on top of their main practice’s 401(k). ⁶

Smart Entity Structuring

As Dave DeWolf outlines in Your Business Entity Structure Matters, choosing between an LLC, S corp, or multi-entity arrangement is more than a legal formality; it’s a strategic choice that shapes how much you keep versus pay in taxes, and how easily you can pivot in the future.

Navigate State and Local Tax (SALT) Caps with Entity-Level Solutions

Especially applicable in high-tax states like California:

State-Level Workarounds
Some states allow pass-through entities to pay state tax at the entity level, effectively bypassing the $10,000/$40,000 federal SALT deduction cap. ⁷

Use Philanthropy to Offset Tax and Fuel Impact

Donor-Advised Funds (DAFs)
With a DAF, you can lump multiple years of contributions into a single year, allowing you to obtain an immediate tax deduction up to 30% of your adjusted gross income (AGI) for non-cash contributions (60% for cash contributions)*, and distribute grants to charitable organizations on your own schedule.

Depending on the DAF sponsor, accepted assets often include the following: ⁸

Publicly traded securities (stocks, ETFs, mutual funds), in particular highly appreciated shares, can be transferred directly to the DAF without triggering capital gains
Restricted stock, subject to certain legal and valuation considerations
Privately held business interests, such as C or S corp shares, LLCs, or partnership interests
Real estate, which allows you to bypass capital gains on appreciated homes, land, or commercial property (with appraisal documentation)
Cryptocurrencies, such as Bitcoin or Ethereum, which typically have DAF sponsors that handle the liquidation for you
Fine art, collectibles, life insurance, and other tangible assets, e.g., paintings, sculptures, jewelry, permanent life insurance policies

Qualified Charitable Distributions (QCDs)
At age 70½+, the IRS allows you to make up to a $108,000 tax-free transfer from your IRA to a charity, reducing your tax liability while also fulfilling your required minimum distributions. This can be both a strategic and generous move. ⁹

Conclusion

Taking a holistic view of your financial structure can help you identify key tax strategies that allow you to reduce your taxes and secure your financial future. With these strategies, you’re not just reducing tax; you’re engineering financial leverage, which helps you supercharge retirement contributions, optimize your taxes, and maximize your impact through charitable giving. These strategies can empower top-tier professionals to maintain their lifestyle and legacy while building wealth efficiently. Talk to a Quantum financial advisor today to see if these strategies can help you.

*This applies to tax year 2025. As a result of the One Big Beautiful Bill Act, there will be changes to the charitable contribution deduction starting in 2026.

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