Tax planning and wealth building strategies from Kristin McKenna, CFP®. Tax-conscious wealth planning is critical for any high-income taxpayer: asset location and tax-efficient investing, stock option and equity compensation exercise and sale strategies, qualified small business stock, retirement income tax planning and bucketing strategies, deferred compensation, employer plans for business owners, charitable tax planning and donor-advised funds, reducing taxable income, changes in tax law.
Updated for 2025 and 2026. If you have incentive stock options, you’ve probably heard of the alternative minimum tax (AMT). Essentially, the alternative minimum tax is a prepayment of taxes. In years when not subject to the AMT, you can receive an AMT credit. The credit reduces your tax liability
The “One Big Beautiful Bill Act” (OBBB Act), signed into law by President Trump on July 4, 2025, represents a massive overhaul of federal tax policy. The expanse and complexity of the new tax bill cannot be understated. Given the breadth and recency of the bill, tax, financial, and legal
What is a capital gains tax? When you sell an asset like a stock or a home, your gain could be taxable. The tax rate will depend on several factors, such as your holding period, type of asset, and your taxable income for the year. Depending on your income, it’s
When’s the best time to exercise your stock options? With stock options, employees have the right (not obligation) to buy the shares. When you exercise your stock options you purchase company shares. Though early exercises are possible, the default setup is for employees to first have the options to exercise
A step-up in basis is a tax advantage for individuals who inherit stocks or other assets, like a home. A stepped up basis can apply to stocks held individually, jointly, or in certain types of trusts, like a revocable trust. Here’s how stepped up cost basis works on stock and
Tax implications of exercising and selling stock options If you have stock options as a large part of your income, taxes are especially important. There are two types of stock options: incentive stock options and non-qualified stock options. How stock options are taxed depends on the type of options you
Updated for 2024 – 2025. Investors often ask: should I be making nondeductible IRA contributions? In the vast majority of cases the answer is no. Why non-deductible? Because many taxpayers earn too much to make pre-tax IRA contributions as they have a 401(k) at work. Although any investor with earned
Includes QSBS changes from the July 4, 2025 OBBB tax bill. If you invested in a startup or small business (founders, employee exercise of stock options, business owner), you need to know about qualified small business stock. If eligible, you may be able to exclude up to 100% of the gain
The IRS released the 2025 401(k), 403(b), and SEP IRA contribution limits, including a new special catch-up contribution for workers age 60 to 63. The IRA and Roth IRA contribution limits are unchanged but income eligibility for tax-deductible IRA contributions and Roth IRA contributions have changed. Also updated: health savings
6 tax strategies for incentive stock options and AMT in 2025 and 2026 Triggering the alternative minimum tax isn’t the end of the world, but you don’t want to do it by accident. Here are six tax planning strategies to consider when exercising and selling ISOs in 2025: Exercise early