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High Income
2 MIN READ
UPDATED APRIL 2026

High income, high complexity.

READ2 min · UPDATED
Reviewed against primary sources cited at the bottom of this page.

Once you're above the Roth IRAIndividual Retirement Account (IRA)A personal retirement savings account with tax advantages. Two main types: Traditional (tax now, pay later) and Roth (pay now, tax-free forever).Full definition income limit, the standard playbook changes. Backdoor Roth, mega backdoor, NIITNet Investment Income Tax (NIIT)A 3.8% extra federal tax on investment income for higher earners (above $200k single, $250k married).Full definition, IRMAAIncome-Related Monthly Adjustment Amount (IRMAA)A Medicare surcharge added to your monthly premium if your income exceeds certain thresholds.Full definition, equity comp, and state domicile planning all become relevant. The decisions are not harder, just different.

This page covers personal finance fundamentals that apply regardless of your view on Bitcoin or fiat currencyfiat currencyMoney declared legal tender by a government, not backed by a physical commodity. Its value rests on trust in the issuing government.Full definition.

This page covers US-specific accounts and tax law. Outside the US? The principle (rising income reveals new optimization layers) applies; the specific rules differ.
THE SHORT VERSION

High income is a good problem. But the standard personal finance advice stops being useful around $150,000. The Roth IRA phases out, the backdoor becomes necessary, equity comp introduces complexity, and the NIIT starts taking an extra 3.8% on investment income. This page maps the strategy layer that unlocks above that threshold.

Start here

1 · THE WORKAROUND
Backdoor Roth IRA
Available regardless of income. Watch the pro-rata rule if you have existing pre-tax IRA balances.
2 · THE SURPRISES
NIIT and AMT
The two taxes that surprise high earners every year. NIIT alone adds 3.8% on investment income above the threshold.
3 · THE LARGEST LEVER
State domicile
The highest-leverage tax decision for large Bitcoin holders. California to Texas on a $1M gain saves approximately $133K in state tax alone.

Your most important tools

Backdoor Roth Pro-Rata
Does your existing IRA balance create a tax problem when you do a backdoor conversion?
Roth Conversion Sweet Spot
How much to convert this year while staying in your target marginal bracket.
IRMAA Estimator
Will a large conversion this year raise your Medicare premium two years later?

Common questions

I earn over $168,000. Can I still do a Roth IRA?

Yes, via the backdoor Roth. Contribute after-tax to a Traditional IRA, then convert. Watch for the pro-rata rulepro-rata ruleAn IRS rule that says if you have a mix of taxed and untaxed money in any of your retirement accounts, you cannot just move the taxed portion to a Roth. Each move is considered a proportional slice of both. This breaks the so-called backdoor Roth strategy if you have an old work retirement account holding pre-tax money.Full definition if you have existing pre-tax IRA funds. Backdoor Roth →

What is the NIIT and do I owe it?

A 3.8% surtax on investment income above approximately $200K single or $250K MFJMarried Filing Jointly (MFJ)A tax filing status where a married couple combines their income and deductions on one tax return.. Applies to Bitcoin capital gainscapital gainsThe profit from selling an asset for more than you paid for it. Taxed differently depending on how long you held the asset., dividends, interest, and rental income. NIIT and AMT →

I have ISOs or RSUs at my company. How do I handle them?

ISOsIncentive Stock Option (ISO)A right your employer gives you to buy company shares at a fixed price later. Cheaper taxes than other stock options if you hold long enough, but can trigger an unexpected extra tax called AMT.Full definition can trigger AMTAlternative Minimum Tax (AMT)A second federal tax calculation. You compute your normal tax, you compute AMT, and you pay whichever is higher. Often triggered by employee stock options or large state-tax deductions.Full definition at exercise. RSUsRestricted Stock Unit (RSU)Company shares your employer promises to give you over time, usually a chunk every year for four years. The shares are taxed as regular wages on the day each chunk lands in your account.Full definition are taxed as ordinary income at vest. The timing decisions are significant; many people leave money on the table by treating them as auto-pilot. Equity compensation →

Does it make sense to move states for a Bitcoin sale?

California at a $1M gain: approximately $133K in state taxes. Texas: $0. The move has to be a real one. California audits departing high earners aggressively. State domicile →

Should I use a mega backdoor Roth?

If your 401k plan allows after-tax contributions with in-plan Roth conversionRoth conversionMoving money from a tax-deferred retirement account (where you'll owe tax later) into a Roth account (where everything grows and comes out tax-free). You pay regular income tax this year on the amount moved.Full definition: yes, up to an additional approximately $43,500 into Roth annually. Mega backdoor Roth →

Reading path

  1. Backdoor Roth
  2. Mega backdoor Roth
  3. NIIT and AMT
  4. Equity compensation
  5. Bitcoin taxes
  6. State domicile
  7. Roth conversion timing
  8. Roth conversion sweet spot tool

Last updated 2026-04-30. Not financial advice. Do your own research.

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