Most tax mistakes don't feel like mistakes when they happen. They feel like reasonable defaults. The damage shows up later, when it's too late to fix — usually in the form of an unnecessary RMD, a Medicare premium hike, or a tax bracket the household didn't plan to be in.
Three of the most common, and most fixable:
1. Maxing the wrong retirement bucket
High earners default to maxing pre-tax 401(k) contributions because the immediate deduction feels valuable. For many, the real win is the opposite: funding Roth options aggressively, accepting the tax hit now, and locking in tax-free growth for decades. The math depends on:
- Current bracket vs. expected retirement bracket
- How much of the household balance sheet is already pre-tax (RMDs in your 70s)
- Estate plans (Roth assets pass to heirs more efficiently)
- Legislative risk (rates aren't fixed)
Ignoring after-tax 401(k) contributions and Mega Backdoor Roth options is one of the most common high-earner mistakes — and one of the easiest to fix once it's identified.
2. Not realizing gains in the right years
Most investors think about capital gains in the year they sell. Better planners think about gains across the five-year window around significant life events: business sales, sabbaticals, retirements, and the years between retirement and Social Security.
There are years your taxable income is unusually low. Those are the years to harvest gains — selling appreciated assets, paying capital gains tax at the lowest possible rate (sometimes 0% for joint filers), and resetting cost basis. Most clients pass through these windows without using them, then realize the same gains five years later in a much higher bracket.
3. Skipping the QCD as soon as it's available
Once you turn 70½, the IRS lets you make Qualified Charitable Distributions (QCDs) — direct transfers up to $108,000/year (2026) from your IRA to a charity, satisfying RMDs without hitting your AGI.
QCDs are a near-perfect tool for charitably inclined retirees because they:
- Reduce taxable income (unlike a standard charitable deduction, which only helps if you itemize)
- Lower IRMAA premiums (which are based on AGI)
- Reduce the chance Social Security gets taxed at a higher rate
- Effectively give you a deduction even under the post-2017 increased standard deduction
The mistake we see: people start QCDs only after multiple years of inefficient charitable giving from the wrong accounts. Use them as soon as eligible.
Tax planning isn't about tricks. It's about timing. The right move in the wrong year is the wrong move.
At IronBridge, every household-level review includes a five-year tax projection coordinated with the client's CPA. Schedule a conversation.