Mid-Year Money Moves: 5 Smart Tax Strategies for Equity Holders & High-Earning Professionals
It’s nearly July — and while summer vacation plans may be top of mind, your tax strategy should be, too.
Why? Because mid-year is one of the most overlooked yet critical times to proactively manage your 2025 tax bill and optimize your overall wealth plan — especially if you’re a high-income professional with stock options, RSUs, K-1 income, or a business.
Whether you're a tech exec with equity grants, an attorney in a partnership structure, or a business owner with pass-through income, the tax code offers strategic opportunities — if you plan ahead. Waiting until December (or worse, April 2026) is simply too late.
Inspired in part by recent conversations on the WSJ’s Your Money Briefing and the latest IRS guidance on capital gains and tax treatment of equity comp — here are 5 powerful mid-year money moves you can make now.
1️⃣ Review & Strategize Equity Compensation Events Before Year-End
If you’re a tech professional or startup employee, chances are your compensation includes some combination of:
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Incentive Stock Options (ISOs)
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Non-Qualified Stock Options (NSOs)
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Restricted Stock Units (RSUs)
Each of these is taxed differently — and timing matters. For example:
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ISO exercises could trigger Alternative Minimum Tax (AMT) liability if not managed carefully.
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RSUs vest automatically and create ordinary income when they do — which may bump you into a higher tax bracket unless offset.
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NSO exercises trigger immediate income tax and payroll taxes on the spread at exercise.
👉 Mid-year action: Work with your advisor and CPA to model various scenarios:
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Should you exercise ISOs this year to take advantage of lower AMT thresholds or to start the clock on long-term capital gains?
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Should you defer or accelerate RSU sales depending on your income spike this year?
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Can you pair stock sales with tax-loss harvesting or other income deferral?
Example: A client at a public tech company had a major RSU vesting scheduled in Q4 — pushing their expected income to $750k. By adjusting the timing of stock sales and realizing capital losses on legacy holdings, they reduced their effective tax rate by over 6 percentage points.
2️⃣ Revisit Estimated Taxes (Especially If You Have K-1 or Variable Income)
If you’re an attorney in a partnership, a business owner, or a consultant with variable income, your tax bill is not automatically withheld like a W-2 employee’s is. You likely owe quarterly estimated payments.
👉 Mid-year action: Now is the time to run a pro forma tax projection:
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How are your distributions/K-1s tracking so far?
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Are you on pace to meet safe-harbor estimates (to avoid underpayment penalties)?
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Did you have a liquidity event, capital gain, or bonus in Q1/Q2 that requires adjusting Q3 payments?
Example: A corporate attorney we work with recently made partner. Their initial firm projection underestimated 2025 income by 30% due to unexpected client bonuses. A mid-year review saved thousands in potential penalties and ensured they could plan for a more accurate tax liability.
3️⃣ Optimize Retirement Contributions & Mega-Backdoor Roth Opportunities
For high earners maxing out 401(k)s — especially those in tech or business owner roles — mid-year is also the time to explore additional tax-advantaged saving:
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Are you on track to fully max out traditional 401(k) or 403(b) contributions?
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Does your plan allow after-tax contributions, enabling a Mega Backdoor Roth?
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Are you eligible for SEP IRA or Solo 401(k) contributions if you have side income or a business entity?
- Did you make your self-employment retirement contribution for last year?
👉 Mid-year action: Analyze your cash flow and contribution pace. It’s easier to catch up in July than in December.
Example: A startup founder with $500k income structured an LLC for consulting income, enabling $66k of SEP IRA contributions — creating both a tax deduction and long-term compounding potential.
4️⃣ Evaluate Charitable Giving Strategies Early
High-income years — such as those with large bonuses, stock vesting, or business exits — are ideal times to harvest tax savings through charitable giving.
👉 Mid-year action: Consider front-loading giving:
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Donor-Advised Funds (DAFs) allow you to contribute appreciated stock and take an immediate deduction.
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Qualified Charitable Distributions (QCDs) from IRAs for those 70½+ can further offset income.
Example: A senior software engineer with $300k in RSU gains funded a DAF in July, donating low-basis stock. Result: avoided $25k in capital gains tax and secured a six-figure charitable deduction.
5️⃣ Plan for State & Local Tax (SALT) Exposure
If you live in a high-tax state (CA, NY, MA, NJ), SALT planning should be on your radar. The $10k SALT cap is still in effect — but mid-year planning may mitigate some of the pain:
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Pre-pay property taxes (if advisable)
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Revisit business structures for pass-through entity tax elections (PTET) — available in many states to allow a deduction at the entity level.
👉 Mid-year action: Consult with a tax expert to model whether your LLC or S-Corp can take advantage of these elections.
Example: A Bay Area business owner elected California’s PTET, reducing their federal taxable income by over $20k annually.
Conclusion: Don’t Wait for December — Optimize Now
Too many high earners wait until December — or even next April — to think about tax planning. But by then, most of the best strategies are off the table.
Taking action now — whether you're a tech professional with equity, an attorney with K-1 income, or a business owner navigating multiple income streams — can:
✅ Significantly reduce this year’s tax bill
✅ Improve long-term wealth accumulation
✅ Reduce unpleasant surprises come filing time
👉 Next step: If you’re unsure how these strategies apply to your unique situation, consider scheduling a mid-year financial review with a holistic advisor who can coordinate with your CPA and legal team.
Sources:
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“Your Money Briefing” podcast, Wall Street Journal, May 2025 episodes
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IRS Notice 2024-55: Guidance on taxation of equity compensation
