# highincometaxhacks

> Plain-English briefing on legal tax strategies for W-2 professionals earning $200K–$1M+. Every strategy cites the underlying statute or Treasury regulation. Every example names its assumptions. Operated by Cost Seg Smart.

## Featured strategies

- [Cost Segregation](https://highincometaxhacks.com/#cost-seg): An engineering-based study that reclassifies building components into 5-, 7-, and 15-year property under IRC §168. Unlocks 100% bonus depreciation in year one. Typical year-one deduction: 20–35% of basis. For a $600K short-term rental, this means $120K–$180K accelerated, worth $38K–$58K saved at 32% bracket.

- [Short-Term Rental Loophole](https://highincometaxhacks.com/#str): Carve-out in Treas. Reg. §1.469-1T(e)(3)(ii). When average guest stay ≤7 days and owner materially participates, rental losses offset active W-2 income instead of being suspended as passive losses. A W-2 surgeon with one STR can generate $150K–$200K in year-one deductions against ordinary income.

## All eight strategies

- **Cost Segregation** — IRC §168. Real estate owners, STR hosts. Est. year-1 savings: $25K–$180K.
- **STR Loophole** — Treas. Reg. §1.469-1T(e)(3)(ii). W-2 professionals with a short-term rental. Est. year-1 savings: $18K–$120K.
- **1031 Exchange** — IRC §1031. Investment property sellers. Defer federal capital gains tax by rolling proceeds into like-kind property within 180 days. Est. year-1 savings: $40K–$500K.
- **Backdoor Roth** — IRC §408A + Notice 2018-74. High earners above the Roth phaseout ($240K MFJ / $161K single, 2026). Est. year-1 savings: $1.5K–$7K.
- **S-Corp Optimization** — IRC §§1361–1378. Self-employed / 1099 consultants. Split pass-through income into reasonable wages plus distributions; distributions escape 15.3% SE tax. Est. year-1 savings: $8K–$45K.
- **Opportunity Zones** — IRC §1400Z-2. Capital gain recognizers. Defer current gains and eliminate gain on QOZ investment held 10+ years. Program extended through 2028. Est. year-1 savings: $20K–$300K.
- **Solo 401(k)** — IRC §401(k) + §415. 1099 / side-business owners. Contribute as both employee and employer — up to $70,000 total in 2026. Mega backdoor Roth optional. Est. year-1 savings: $15K–$25K.
- **Augusta Rule** — IRC §280A(g). Business owners with a home. Rent primary residence to your own business up to 14 days/year — rental income is tax-free to the homeowner. Est. year-1 savings: $3K–$18K.

## Calculator

- [Savings estimator](https://highincometaxhacks.com/#estimator): Takes household income, filing status, property situation, and work arrangement. Applies 2026 federal brackets. Outputs a ranked list of which of the 8 strategies apply and estimates year-1 federal tax reduction at the marginal rate. Directional planning tool — does not handle AMT, NIIT, state tax, QBI phase-outs, or recapture.

## FAQ

- [FAQ section](https://highincometaxhacks.com/#faq): Covers legality, eligibility, methodology, calculator accuracy, and when to talk to a CPA.

## Key facts

- Site covers only provisions of the Internal Revenue Code, Treasury regulations, and IRS-published revenue rulings — no shelters, offshore structures, or aggressive characterizations.
- 100% bonus depreciation was permanently restored for 2025+ by the One Big Beautiful Bill Act (OBBBA), signed July 2025.
- Cost segregation and the STR loophole are the highest-leverage combination for W-2 earners who own a short-term rental. Most CPAs will not raise either strategy unless asked.

## Disclosure

Operated by Cost Seg Smart. Cost segregation and STR content links to costsegsmart.com, where the site operator sells cost segregation studies. Other strategy cards may link to affiliate partners — disclosed in footer.

## Contact

Cost Seg Smart — support@costsegsmart.com — https://costsegsmart.com