Tax Saving Strategies: Tips from A Wealth Management Firm –PillarWM

Individuals with a high and ultra-high net worth pay the most amount in taxes everywhere. However, that also means that they get to save the most in taxes. If you’re an individual with a high net worth, then it can help you save big bucks in taxes if you familiarize yourself with a few tax saving strategies: tips from a Wealth Management firm. 

With the right planning and strategy, high net worth individuals can manage their taxes more effectively and economically. If you are an individual with a high net worth with at least $10 million in liquid assets, then check out our guide on how to find a financial advisor that prioritizes tax minimization.



7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning


The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

An experienced team of financial advisors can take charge of all your tax-related tasks and manage them in a way that serves your best interest. Filing and keeping track of taxes is a hectic chore, especially for people with a high net worth. At Pillar Wealth Management, we make life easy for you by assigning our best financial planners to handle all your taxation procedures. Our team of experienced professionals works with high net worth individuals with $5 million to $500 million in liquid assets. You can reach out to us to schedule a free initial consultation with our experienced advisors.

In the meantime, please continue reading this blog to learn a few valuable tax saving strategies and everything that you need to know about taxes. Let’s begin!

What Are Some Tax Planning Strategies?

In this section, we’ll share some of the best tax planning strategies for high net worth individuals from our experienced advisors at Pillar Wealth Management. Take a look below:

1.    Manage Assets like businesses

If you’re a high net worth individual who wants to save big on their taxes, then we recommend setting up a company or an LLC to manage your investments. You could include real estate, portfolio assets, or a business. It may sound like a lot of trouble at first, but creating a company will benefit you in the long run. It allows you to govern all your assets efficiently while also giving you opportunities to save on taxes.

When you initiate a management company for taking care of your assets, then you can deduct the expenses of the LLC as business expenses. Click here to get in touch with one of our advisors for guidance on how to manage assets as a business. 

2.    Increase Your Contributions to 529 Plans

If you have 529 plans for your kids, then maximizing your contributions to these plans can help save a significant amount in taxes. The funds in 529 plans grow tax-free, and you can use them to cover your children’s educational costs.

This is an excellent strategy for securing your child’s future while also managing your taxes more efficiently. Moreover, the revised tax laws now allow you to cover K-12 education at private schools instead of just being restricted to college. 

You can contribute up to $15,000 as an individual annually or $30,000 as a couple. However, please note that your 529 contributions aren’t deductible on federal taxes.

3.    Gift and Estate Exemptions

Gifts and estate exemptions are another effective way of bringing down your taxable income.High and ultra-high net worth individuals usually set up long-term trust funds. It allows them to pass down their wealth from one generation to the next.

Although these funds do get subjected to income tax, they aren’t taxed if the gift reaches the limit. Moreover, these funds are also not subjected to any estate taxation at the time money comes out.

This tax saving strategy is only ideal for individuals who have at least $5 million to $10 million in liquid assets that they can commit. 

tax saving strategies

4.    Investment in Municipal Bonds

The reason why we recommend investing in municipal bonds over equities is that the municipal bonds’ interest is tax-free. Although they have a slower growth rate, they make up for it by saving you money in taxes. If a tax-saving strategy is your priority, then municipal bonds are the best place to start.

Municipal bonds help stabilize your portfolio when your equities are having a down year. Investment in these bonds makes your asset allocation plan healthier. Moreover, interest from municipal bonds is tax-free in some states as well. So, if you are based in one of those states, you can save double.

5.    Maximize your Contributions to your 401K

Contributions to your 401k reduce your taxable income and count as tax deductions. That is why we recommend maximizing your contributions to get the best of both worlds in terms of saving in taxes and expanding your 401k.

You can contribute up to $18,500 each year to your 401k. If you’re over 50, then you can also contribute an additional $6,000 annual catch-up.  For high and ultra-high net worth investors, reducing taxable income makes an immense difference in strengthening their portfolio. Click here to read our guide on how to improve portfolio performance.

6.    Increase Contributions to your Health Savings Account

Another excellent tax saving strategy is to increase contributions to your health savings account. Although the maximum amount that you can contribute to savings accounts like this one doesn’t look large enough, it still accumulates and becomes a sizable number over the years.

At the very maximum, you can contribute $3420 into your health savings account as an individual. As a couple, you can contribute up to $6900to your health savings account. If you’re over 55, you can increase this amount by $1,000.

One of the biggest advantages of contributing to your HSA is that it grows tax-free. You can use the funds to cover all your medical expenses at any time. Plus, you don’t lose any money in any situation. 

7.    Give to Charity

Giving to charity is one of the best ways to reduce your taxable income while also helping the causes that matter to you. The new tax laws have raised the amount of standard deduction to $24,000. For high and ultra-high net worth individuals, it will not be a problem to exceed this limit.

The government allows you to claim tax deductions on charitable giving and donations of up to 60% of your gross income (adjusted) and 30% of appreciated assets.

Donating to causes that you care about allows you to help make a positive impact while also reducing your tax burden. You may also make donations in the form of clothes, real estate, cars, stock options, and other items of value to nonprofit causes.

Donating items instead of money allows you to reap tax benefits without any impact on your accounts. So, if you own stuff that you don’t need or use, you can give it away to charitable causes and get a tax deduction for them. If you want to find a financial advisor who knows which securities to invest in to lower your tax payments, click here to read our exclusive guide.

8.    Convert 401k or IRA into a Roth

Generally, Roth investments have a contribution limit, and high and ultra-high net worth individuals are restricted from using them. However, Roth investments are also tax-free, so it is worth an effort to look for other ways to access them.

If you already have IRA or 401k investments, then you can consider rolling them into a Roth. It can be a complicated process to pursue this, so we suggest hiring financial experts who have experience with such cases. It is important that you convert to Roth as soon as possible because, in the first year, you will have to pay taxes on the amount that you roll into the Roth account. So, it’s best to get started sooner, so it has more time to grow tax-free.

What Are Four Types of Taxes That You Pay?

There are a variety of tax types and systems that you need to keep track of every year. In this section, we will explain four main types of taxes that are especially relevant to high and ultra-high net worth individuals. Keep reading below:

1.     Progressive Taxes

Progressive taxes imply that the more income an individual has, the higher amount they pay in taxes. This type of taxation is mostly subjected to income taxes. The tax rate gets progressively higher for individuals and organizations who earn more.

Federal and state income taxes are common examples of progressive taxation. This type of taxation is also called graduated income tax. This is the most fundamental type of taxation that each individual has to pay.

2.     Regressive Taxes

Regressive taxes are the exact opposite of progressive taxes in terms that the amount of taxes become lower, the wealthier an individual is, or that the taxes have a flat rate. Flat taxes have a much more significant impact on low-income individuals as compared to wealthier individuals. For instance, a 20% tax wouldn’t cause much trouble for a high-income person. However, a person who is already on low income would be hit the hardest because of a 20% cut. Social security tax is a common example of regressive taxation. 

3.     Capital Gains Taxes

You are subjected to capital gains taxes on your net gains when you sell assets. These assets include real estate and investments. You also have to pay this tax when you’re selling valuable items such as a rare collection or jewelry. 

The rate of taxes that you pay depends on the number of years that you have owned that asset. If you have owned an asset for less than a year, then you have to pay the short-term capital gains rate. In the case that you’re selling an asset that you have owned for longer than a year, you have to pay long-term capital gains tax rates. The long-term rates are mostly lower than regular tax rates. So, waiting a year before selling your assets is a great tax saving strategy.

4.     Consumption Taxes

Consumption taxes are the ones that you pay for goods and services that you buy. These are also called sales or retail taxes. You don’t have to pay this type of tax separately as they are paid at the time you purchase the time. Consumption taxes are indirect taxes because the government collects the tax from the retailer to whom you pay. Sales and value-added taxes are the two types of consumption taxes that you pay.

Is Avoiding Tax Illegal?

When you think tax avoidance, you might think “illegal.” However, that is not really the case. Tax avoidance isn’t tax evasion, which is illegal. Tax avoidance is a legal method that you use to minimize your taxable income amount.

Tax avoidance is achieved by claiming different kinds of allowable tax deductions. Individuals and organizations do this by making investments with tax advantages and buying tax-free funds and municipal bonds.  

Tax avoidance is a legitimate method that uses legal measures to minimize the payable tax amount. On the other hand, tax evasion is the use of illegal means to avoid taxes, such as false deduction claims and misreporting income.

If you are a high net worth individual with $10 million in liquid assets, then check out our guide on how to find a financial advisor that prioritizes tax minimization.


As a high net worth individual, you can use a variety of strategies to increase your tax deductions and overall income tax amount. By investing in savings funds, buying municipal bonds, and giving to charity, you can minimize the amount that you pay in taxes each year.

If you need help with tax saving strategies, get in touch with our experienced finance professionals at Pillar Wealth Management for a free consultation. Our team is committed to making sure that we provide our clients with the most profitable tax plans and strategies.


To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.

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