What Tax Strategies Do People With $10 Million Actually Use?
- Charlie Horonzy
- Aug 3
- 5 min read
Updated: Aug 17
If you’ve built a net worth of $10 million or more, take a second, pat yourself on the back, and pop open a nice bottle of bourbon. You’ve spent decades making smart decisions, taking calculated risks, and staying disciplined.
But here’s a funny thing I see all the time in my practice: many high-net-worth families are still running the exact same tax playbook they used when their portfolio was sitting at $500,000.
When you were building your nest egg, tax season meant looking in the rearview mirror every April to see how much you owed Uncle Sam. But at $10 million? Taxes become your single largest lifetime expense. The goal isn't just to scrape together a few extra deductions this year—it's about playing the long game to minimize what you pay over decades, while protecting your family and leaving a lasting legacy.
The good news? The secret isn't exotic, questionable offshore tax shelters or rolling the dice on "loophole of the month" strategies. The real secret is consistency.
Here is how $10M+ families—and the folks we work with right here in Chicago—keep Uncle Sam from crashing their retirement party.
But first - I help people retire in Chicagoland and across the country in a tax-efficient way. You may want to earmark these other blogs about financial planning for people in Illinois and other places in the United States.
And now – for the feature presentation!
1. Stop Asking the Wrong Tax Question
Most people look at taxes like a annual chore: "How can I lower my tax bill this year?"
Successful families flip the script and ask: "How do I minimize my tax bill over the next 30 years?"
Those are two completely different questions. Sometimes, paying a little more in tax today opens the door to massive savings down the road. Real tax planning isn't a scramble every April—it’s an ongoing, year-round strategy.
2. Play Matchmaker With Your Investments (Asset Location)
It’s easy to get obsessed with investment returns, but high-net-worth investors focus on after-tax returns.
The investment itself matters, but where you hold it matters just as much.
Taxable Accounts: Great for tax-efficient equities and assets you might harvest losses on.
Traditional IRA/401(k)s: Ideal for high-yield bonds or tax-inefficient strategies.
Roth Accounts: Perfect for your highest-growth assets so they can compound completely tax-free.
Think of it like putting the right puzzle pieces together. Putting a tax-inefficient asset in a taxable account is just handing free money to the government.
3. Make Peace With Market Dip: Harvest Losses Intentionally
Nobody likes seeing red in their portfolio. But instead of letting market downturns ruin your day, use them as a tool.
Tax-loss harvesting allows you to capture losses to offset capital gains, reduce taxable income, and rebalance your portfolio efficiently. The key is making this a proactive, year-round habit—not a panic-driven exercise on December 31st.
4. Don't Sell Everything at Once
Whether you own appreciated company stock, real estate, or private business equity, pulling the trigger all at once can trigger a jaw-dropping tax bill.
Strategic wealth management involves spreading out gains, using charitable strategies prior to a sale, or utilizing installment sales. Controlling when your income lands on paper gives you ultimate control over your tax bracket.
5. Upgrade Your Charitable Giving
If you’re still writing personal checks to your favorite charities out of your checking account, stop right there!
High-net-worth families maximize every charitable dollar by:
Donating highly appreciated stock instead of cash (avoiding capital gains tax entirely).
"Bunching" donations into high-income years.
Utilizing Donor-Advised Funds (DAFs) or Charitable Remainder Trusts.
You get the satisfaction of making an impact, and Uncle Sam gets a smaller slice. Win-win.
6. Neutralize the "RMD Tax Bomb"
When you have sizeable traditional IRA and 401(k) balances, Required Minimum Distributions (RMDs) will eventually kick in. And when they do, they can push you into top tax brackets, increase your Medicare premiums (IRMAA), and make your Social Security taxable.
Waiting until age 73 or 75 to think about RMDs is a mistake. By looking ahead in your 50s and 60s, you can execute multi-year Roth Conversions during lower-income gap years, systematically reducing the size of that future tax bomb.
7. Mind the State Lines
If you own multiple homes or spend winters somewhere warmer than a chilly Chicago January, state taxes deserve a seat at the table.
Understanding how different states tax retirement income, capital gains, and estates can save you six figures. You shouldn't uproot your life solely for taxes, but you should know how state lines affect your bottom line.
8. Break Down the Silos (Get Your Team Talking)
Here’s a flaw I see constantly: a client has a great CPA, a great estate attorney, and a great financial advisor—but none of them talk to each other.
When your team operates in silos, opportunities fall through the cracks. The biggest tax wins don't come from one magic bullet; they come from coordinating dozens of moving parts across your entire financial life.
9. Don't Let the "Tax Tail" Wag the Financial Dog
Here is my golden rule: Never make an investment decision solely to save on taxes.
Taxes are crucial, but your overall financial plan and peace of mind come first. Sometimes paying taxes simply means you made a killer profit—and that’s okay! The goal is to pay taxes intelligently, not to bankrupt your strategy just to avoid a tax bill.
Frequently Asked Questions
What tax strategies do people with $10 million use?
They focus on long-term, proactive planning over aggressive "get rich quick" shelters. This includes strategic asset location, systematic Roth conversions, tax-loss harvesting, structured charitable giving, and unified estate planning.
Should wealthy people avoid capital gains taxes entirely?
Rarely. The goal isn't necessarily zero taxes—it's controlling when and how those gains are realized so you keep more of what you've earned over your lifetime.
Is tax planning only important right before retirement?
Not at all! Proactive tax planning adds value during your peak earning years, the transition into retirement, and throughout your legacy planning years.
The Bottom Line
When your net worth reaches eight figures, almost every financial move has a tax consequence. The families who keep more of their hard-earned wealth aren't using secret codes—they are making deliberate, coordinated decisions year after year.
If you’re in the Chicago area (or anywhere across the country) and want to build a holistic, tax-focused plan that connects all the dots, let’s chat. The best tax strategy isn't a one-time trick—it’s a plan tailored around the life you actually want to live.
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