When it comes to taxes, most Americans take a passive approach: gather receipts, hand them to the accountant, and brace for the final number. The ultra-wealthy, however, play an entirely different game — one that treats taxes not as a fixed cost but as a controllable expense.

Charlie Dombrek, CEO of Axium Wealth, has spent decades guiding affluent clients through the ever-changing tax landscape. In a conversation with Forbes, he shared why proactive planning is more critical than ever — and why the wealthy rarely pay anything close to the headline rates most people assume.

The Changing Tax Landscape

The 2017 Tax Cuts and Jobs Act (TCJA) created a favorable environment for top earners, locking in a maximum federal income tax rate of 37% and expanding key deductions such as Section 179 expensing and the Qualified Business Income deduction. “The One Big Beautiful Bill added significant tax planning opportunities,” says Dombrek. These include accelerated depreciation, immediate expensing of research and development costs, and even permanent Qualified Opportunity Zones.

But the clock is ticking on some incentives. “The Bill does restrict and phase out certain energy credits that were enacted as part of the Inflation Reduction Act of 2022,” Dombrek warns. “Taxpayers in high tax brackets should explore the use of these programs before they phase out in the next two years.”

When to Get Serious About Tax Strategy

For Dombrek, tax strategy isn’t just for billionaires — it becomes critical once a household enters the 32% bracket or higher. At that level, even small percentage reductions translate into significant savings.

“If you are in the highest tax bracket which is 37% and live in a high tax state like California, you are losing more than 50% of your income to taxation when you add on the net investment tax,” he notes. For those selling highly appreciated assets, or with estates exceeding $30 million, failing to plan could mean forfeiting up to 40% of their wealth to estate taxes.

The goal, Dombrek says, is simple but ambitious: “Cap the marginal rate of income tax at no more than 24%. If your marginal rate doesn’t exceed 24%, your average rate is typically in the low teens — which is what comprehensive tax planning can achieve.”

Deferral vs. Permanent Savings

One of the first distinctions high-net-worth individuals must make is whether they are deferring taxes or eliminating them. Deferral strategies — such as timing income or using retirement plans — are about kicking the can down the road. “They allow taxpayers to take advantage of the time value of money,” Dombrek explains.

But permanent reduction strategies are even more powerful. These include current deductions, credits, and Roth acceleration strategies that lock in tax-free growth. “Strategies that achieve these results are more preferable to tax deferral techniques,” says Dombrek.

Popular Strategies Among the Affluent

Dombrek points to several tools that consistently help the wealthy keep their effective rates low:

  • Cash Balance Pension Plans – Older business owners can shelter hundreds of thousands of dollars in annual W-2 income.
  • Preferred Investment Partnerships – These Roth acceleration structures channel gains from high-performing investments into tax-free Roth IRAs.
  • Energy Incentives – The Inflation Reduction Act created opportunities to recover as much as 300% of one’s income tax liability over a project’s life.

“The reality is that with proper planning, taxation is a controllable cost,” Dombrek says. But timing is everything: planning must be done before December 31. “Otherwise, you lose the opportunity to implement strategies that reduce current year taxation.”

Mistakes Even the Wealthy Make

Perhaps the biggest oversight is assuming they make too much to benefit from Roth IRAs or tax-advantaged life insurance. Dombrek cites examples like PayPal founder Peter Thiel, who famously grew a Roth IRA to billions. Proper planning can allow high earners to legally fund Roth accounts and accumulate tax-free income for life.

Private placement life insurance offers another overlooked opportunity: investors can fund policies with alternative assets, capture gains tax-free, and even withdraw capital through policy loans without triggering taxes.

The Wealthy’s Secret Advantage

If there is a single difference between how the wealthy and the middle class approach taxes, Dombrek sums it up in one word: access. “The wealthy have access to a suite of integrated planners and advisors whose sole goal is to grow their wealth at a 20% or greater annual rate and to lower the cost of taxation annually to 24% or less,” he says.

Middle-class taxpayers, by contrast, often deal with multiple advisors — accountants, attorneys, financial planners — who may not communicate with one another. “Many CPAs are simply historians,” Dombrek adds, “telling you how much you owe after the fact, when it’s too late to change the outcome.”

For those serious about building and preserving wealth, tax strategy is not a once-a-year exercise — it’s a year-round discipline. By integrating planning into every financial decision, the wealthy don’t just save money; they change the trajectory of their net worth.

Or as Dombrek puts it: “With the right plan, you can keep more of what you earn, create tax-free wealth, and ensure that your heirs inherit your legacy — not your tax bill.”

This industry announcement article is for informational and educational purposes only and does not constitute financial or investment advice.