Five common financial planning oversights can cost high-income families real money, and none of them involves investment performance. They come from when a stock grant is taxed, when money leaves a retirement account, and what gets handed to a charity.
Here are the five oversights, along with what to do about each.
1. Mistiming the Tax on Your RSUs
This is the one I most often catch after the fact rather than before. Restricted stock units are taxed as ordinary income the moment they vest, whether or not you sell a share. Most employers withhold at the flat 22% supplemental wage rate, and if you’re in the 35% or 37% bracket, the difference between what was withheld and what you owe becomes a bill you discover in April.
The second decision arrives after vesting. Shares held more than a year qualify for long-term capital gains treatment on any additional growth, though a concentrated position in your employer’s stock carries its own risk. A large vest also lifts your adjusted gross income, which can pull you into the 3.8% net investment income tax.
If you hold incentive stock options alongside your RSUs, the alternative minimum tax deserves its own conversation with your CPA. The AMT rules changed in 2026. The exemption now begins phasing out at $500,000 of income for single filers and $1 million for joint filers, at double the previous rate, so an option exercise that was harmless in 2025 may not be in 2026.
2. Generous Instincts, Inefficient Mechanics
This is where I see the most generous instincts paired with the least efficient mechanics. If you own stock that has grown in value and you’ve held it more than a year, giving those shares directly to charity usually beats writing a check. You get credit for the shares’ value on the day you give them, and you never pay tax on the growth. Sell the stock first and donate the cash, and you’ve given a slice of that gift to the IRS.
Two new rules in 2026 changed how much of your giving you can deduct.
The first is a floor. If you itemize, the first half a percent of your adjusted gross income no longer counts toward your charitable deduction. On $600,000 of income, that’s the first $3,000 you give, and it comes off the top regardless of how much you give in total.
The second is a ceiling. If you’re in the top bracket, every dollar you deduct now saves you 35 cents, down from 37 cents.
Both rules favor giving a larger amount in one year over giving a little every year. A donor-advised fund is one way to do that. You put several years’ worth of giving into a charitable account in a single year and take the deduction then, while the organizations you support still receive the money gradually.
A charitable remainder trust works differently. You move an asset into the trust now and receive income from it for a set number of years, and whatever remains goes to the charity at the end. It suits families who want to make a large gift while still benefiting from the asset’s income.
If you’re 70½ or older, there’s a simpler route. Money sent straight from your IRA to a charity, called a qualified charitable distribution, never appears as income on your return at all. Neither the floor nor the ceiling touches it, and it counts toward your required distribution once those begin.
None of this is about squeezing out every last dollar. It’s about making sure the money you’ve worked for goes where you intended it to go, whether that’s to your family or to the causes you care about.
3. A CPA and an Advisor Who Never Speak
When your CPA is working from information your wealth advisor doesn’t have, opportunities go unnoticed by both of them.
Capital loss carryforwards sit unused because no one harvested gains against them. Roth conversion windows open and close during low-income years without being modeled. Estate techniques that work ideally when started early are instead started late.
Your tax return tells your advisor things your account statements never do. Your portfolio tells your CPA things the return won’t reveal until the year is over and the options have expired.
I’ve written more about why these two conversations belong together, and it’s some of the least glamorous work I do.
4. The Surcharge Nobody Warns You About
Very few people know Medicare premiums are income-tested until the letter arrives, and by then the tax return that caused it is two years behind you. In 2026, the income-related monthly adjustment amount (IRMAA) begins at $109,000 of modified adjusted gross income for single filers and $218,000 for couples, based on 2024 income. Crossing a threshold by a single dollar triggers the full surcharge for that tier, and the surcharge applies per person.
At the highest tier, that’s an extra $487 per month on Part B, plus as much as $91 on Part D. For a married couple, the annual difference runs into the thousands, typically traceable to one decision made two years earlier, like a Roth conversion sized without checking the tax brackets.
The thresholds are published in advance, so modeling your income against them in October gives you room to adjust before the year closes.
5. Taking RMDs Without a Plan Around Them
Required minimum distributions begin at 73 or 75 depending on when you were born. Anyone born in 1960 or later waits until 75, which covers most people still working today.
By the time someone brings me the notice their IRA provider sends in December, the amount is already set and the year is nearly over. The conversation I’d rather be having happens in the spring, because while the amount itself can’t be changed, nearly everything around it can, including which accounts the money comes from, whether it’s distributed in cash or in shares, and how it fits with the rest of that year’s income.
If you delay your first distribution to April 1 of the year after you reach your RMD age, you’ll take two distributions in that same calendar year, which can push you into a bracket you were trying to stay under.
The years between retirement and your first distribution are often the ideal window for Roth conversions, and for anyone starting at 75, that window is longer than most people expect.
Pick One Leak to Address Before December
You don’t need to address all five leaks this year. Start with the one closest to a decision already on your calendar, whether that’s a vesting schedule or a gift you were planning to make in December.
Have you been avoiding this conversation and would like some help thinking through how to approach it? I’m here. I take a fee-only fiduciary approach to this work, coordinating with your CPA and attorney so the timing of these decisions is deliberate rather than accidental. If any of the five above sounded familiar, I’d welcome the conversation.
Call me at (317) 469-2455, email ssteel@deerfieldfa.com, or find a time on my online calendar.
You can also read what clients say about working with me here.
Frequently Asked Questions
What is a wealth drain in a large investment portfolio?
A wealth drain is a recurring loss caused by tax or planning inefficiency rather than by investment performance. Common examples include under-withholding on equity compensation, avoidable Medicare surcharges, unplanned required minimum distributions, and donating cash instead of appreciated stock. Each is small individually and cumulatively expensive over a long time horizon.
Why do I owe so much tax on my RSUs in April?
Because most employers withhold at the flat 22% supplemental wage rate when your restricted stock units vest. If your marginal bracket is 35% or 37%, withholding covers only part of what you owe, and the shortfall appears at filing. Adjusting withholding or making estimated payments during the year prevents the surprise.
How can I avoid Medicare IRMAA surcharges?
Manage your modified adjusted gross income two years before you want lower premiums, since Medicare uses a two-year lookback. Practical steps include:
- Sizing Roth conversions to stay below the next threshold
- Timing property or business sales across two tax years
- Using qualified charitable distributions to keep income out of your MAGI
Is it better to donate appreciated stock or cash?
Appreciated stock held longer than a year is generally more efficient. You deduct fair market value and avoid capital gains tax on the growth. This matters more in 2026, when itemizers can deduct only giving that exceeds 0.5% of AGI. Deerfield Financial Advisors help clients decide which assets to give and when.
When should I start planning for required minimum distributions?
Begin planning for RMDs roughly 10 years before your RMD age, which is 73 if you were born between 1951 and 1959, and 75 if you were born in 1960 or later. That runway is when Roth conversions, account consolidation, and charitable strategies are still available. Waiting until your first distribution notice arrives leaves you managing a tax bill rather than shaping one.
About Susie
Susie Steel, CFP®, is the COO and a Senior Shareholder at Deerfield Financial Advisors, where she has dedicated over three decades to providing fee-only wealth management with a deep spirit of service. A multi-year “Five Star Wealth Manager,” she specializes in simplifying complex financial planning to create a nurturing, trusting environment for her clients.
