The Top 3 Tax Tricks Every Tech Employee Should Know
As a tech worker, do you ever wonder if you’re missing out on secret tax breaks? The truth is—most tech employees are. For the past 5 years, I’ve been hired by wealthy tech executives at multi-billion-dollar companies to help them save on taxes. And along the way, I’ve learned strategies that almost anyone in tech can use.
In this guide, I’ll break down:
The top 3 tax tricks every tech employee should know
How to actually implement them (even if you’re not a tax expert)
Why taxes can be optional when you plan ahead
1. Use Low-Income Years for Tax-Free Gains
When I was in college, I bought Tesla stock right before it skyrocketed to over a 1,000% return. Great problem to have—but it also meant a crushing tax bill.
That’s when I discovered an IRS rule that allows taxpayers to realize about $100,000 of long-term capital gains tax-free every year (for joint filers). The catch? Your ordinary income shrinks that window.
For example:
If you earn $80,000 in salary, you’ll only have ~$20,000 left for tax-free gains.
But if you’re in a low-income year—like starting a business, taking a sabbatical, or retiring—you can sell appreciated stock and pay $0 in tax.
This is why timing matters. If you know you’ll have a dip in income, plan to realize your gains then.
2. Use a Roth Account (Even If You’re a High Earner)
Think of investing like dining out:
Traditional IRA/401k: It’s like eating first and paying later. The more you eat (the more your investments grow), the bigger your bill (taxes when you withdraw).
Roth IRA/401k: It’s like paying up front at a buffet. Once you’re in, you can pile your plate as high as you want—and it’s all tax-free.
Here’s the challenge: if you earn too much, you “phase out” of Roth IRA contributions. But there’s a workaround called the Backdoor Roth Conversion:
Contribute to a Traditional IRA (almost anyone can do this).
Convert that IRA into a Roth IRA.
Pay tax on the small amount converted, and then enjoy unlimited tax-free growth.
Once your money is inside the Roth, every dollar of growth is yours to keep.
3. Max Out an HSA (The “Free Buffet Coupon”)
If the Roth IRA is like a buffet, an HSA (Health Savings Account) is like walking in with a free coupon. It offers four separate tax benefits—something no other account does:
Payroll Tax Savings – You skip FICA taxes on contributions (saving ~$500/year for a family).
Income Tax Deduction – You can deduct your full contribution, saving up to ~$3,000/year if you’re in a high bracket.
Tax-Free Growth – Money invested inside grows tax-free, just like a Roth.
Tax-Free Spending – Withdrawals for medical expenses are completely tax-free.
Most people underestimate how powerful HSAs can be. With healthcare costs rising in retirement, an HSA can easily save you $6,000 or more every year.
Why Taxes Can Be Optional
Here’s the big takeaway: tax planning is proactive, not reactive. Using TurboTax or a CPA in April is like going to the doctor after you’ve already developed scurvy—too late to fix it.
Instead, you want to:
Time your stock sales
Use Roth conversions
Max out your HSA
With the right strategy, taxes can be optional. The earlier you plan, the more wealth you keep.
Final Thought
While optimizing taxes is powerful, focusing only on taxes can backfire. I’ve seen people make poor financial decisions because they prioritized tax savings over long-term goals.
That’s why my framework is simple:
Optimize for your values and goals first.
Then consider risk.
Then financial merit.
Only then optimize for taxes.
Follow this order, and you’ll save money without jeopardizing your financial security.
