Reduce tax from windfall

FacePalm — Tue, 24 Feb 2026 07:37:38 GMT

My wife is slated to earn a significant money from her work (they call it profit units) in about a year. What can we do now to reduce the tax burden.

Re: Reduce tax from windfall

JanD9 — Wed, 25 Oct 2023 18:01:06 GMT

Congratulations on the upcoming profit units!

There are a couple of things you can do to minimize the tax burden associated with the uptick in earnings – by reducing gross income or by increasing itemized deductions.

The biggest impact to reduce income is to maximize contributions to a tax-deferred retirement account. If you are covered by a high-deductible health plan, you may be eligible to contribute to an HSA (Health Savings Account). The amount contributed to either, subject to annual limitations, will reduce taxable income.
A second method to decrease taxable income would be to increase itemized deductions. For example, contributions to charity could be increased for the year of the profit unit pay (bunch several years of donations into a single year).

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Reduce tax from windfall

Re: Reduce tax from windfall