6 Smart Tax Strategies Investors With $1M+ Are Using to Protect Wealth in 2026

The post 6 Smart Tax Strategies Investors With $1M+ Are Using to Protect Wealth in 2026  by Benzinga Contributors appeared first on Benzinga. Visit Benzinga to get more great content like this.

According to Charles Schwab, investors who work with financial, tax, and wealth advisors may identify strategies that can improve the tax efficiency of their portfolios and potentially enhance after-tax returns.

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6 Smart Tax Strategies High-Net-Worth Investors Use to Protect Wealth 

1. Give your portfolio a strong tax plan

Tax exposure is a constant concern for investors, especially those with a diversified portfolio. A 2017 Elsevier study2 found that financial advisors generally have lower portfolio turnover than other advisors, which can help reduce taxes. 

These advisors will also develop other tax-efficient investing strategies that reduce drag, increase after-tax returns, and make your wealth transfer-ready. 

Overall, a 2020 Vanguard study3 estimated that certain advisor services could add about 3% in net returns annually for some investors, though results vary and are not guaranteed after fees and market effects.

2. Shelter Your Income and Reduce Your Tax Bill

Beyond looking at deductions, a qualified advisor could help high earners implement these tax-saving strategies:

• Maximize deductions (charitable, mortgage, business expenses)
• Use tax-advantaged accounts (401(k), IRA, HSA, FSA)
• Shift into more tax-efficient investments (municipal bonds, ETFs, long-term gains)
• Restructure your business (LLC, S-Corp, or trust-based strategies)

3. Leverage Credits to Reduce Taxes Beyond Adjusted Gross Income 

An advisor will have knowledge of tax credits that high earners can use to save on their taxes, including such credits as: 

• Child & Dependent Care Credit
• Energy-Efficient Home & EV Credits
• American Opportunity & Lifetime Learning Credits
• Saver’s Credit for retirement contributions

4. Use Tax Loss Harvesting to Offset Gains 

A qualified advisor will know how to take advantage of tax loss harvesting to reduce your overall taxable gains, such as: 

• Offsetting gains with currents losses 
• Rebalancing portfolios to be more tax-efficient 
• Creating future opportunities for tax mitigation 

5. Retirement & Legacy Planning: How Taxes Shape Your Financial Future

The use of trusts, gifting, and Roth conversions can not only reduce your tax bill, but it also protects the wealth you’ve built to pass on to your family. 

6. Leverage Expert Guidance—Donʼt DIY Complex Tax Strategies

High earning investors have enough on their plate, and managing taxes alone can be a full-time job. For some investors, an advisor’s fees may be lower than the potential cost of correcting a tax mistake made when filing on your own.

How a Financial Advisor Can Help Lower Your Tax Bill 

• Analyze your withdrawal strategy to keep you in lower tax brackets
• Optimize Roth conversions before RMDs kick in
• Use charitable giving and trusts for smarter tax positioning
• Strategize income to reduce Medicare surcharges
• Build a tax-smart legacy plan for your heirs 

Ready to Take Control of Your Taxes?

Start with AdviserMatch’s no-cost advisor matching tool. 

Sources:

1. https://content.schwab.com/web/retail/public/about-schwab/2024-Charles-Schwab-RIA-Benchmarking-Study.pdf

2. https://finance.wharton.upenn.edu/~itayg/Files/bondfunds-published.pdf

3. https://www.ch.vanguard/content/dam/intl/europe/documents/en/putting-a-value-on-your-value-quantifying-vanguard-adviser-alpha-eu-en-pro.pdf

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The post 6 Smart Tax Strategies Investors With $1M+ Are Using to Protect Wealth in 2026  by Benzinga Contributors appeared first on Benzinga. Visit Benzinga to get more great content like this.