Tax season can feel complicated for anyone. For high-income earners in New York, it can be even more complex. Between federal rules, state taxes, and local taxes in places like New York City, there are many details to track. A small mistake can lead to paying more tax than necessary. In some cases, it can also create problems with the IRS or the state. The good news is that many common issues can be avoided with a little planning. Here are several tax mistakes high-income New Yorkers often make and how to steer clear of them.

Not Planning for New York State and Local Taxes

Many people focus only on federal taxes. In New York, state and local taxes can take a large share of income.

High earners often face:

  • New York State income tax
  • New York City income tax, if they live in the city
  • Federal taxes on top of both

These layers add up quickly.

A common problem is underestimating how much needs to be set aside for taxes during the year. This can lead to a large bill in April or penalties for underpayment.

How to avoid it:
Work with a financial planner or tax professional like the experts at DeSantis, Kiefer, Shall & Sarcone to estimate your total tax burden early in the year. Quarterly planning can help you stay on track and avoid surprises.

Missing Opportunities to Max Out Retirement Accounts

Many high earners save well, but some still leave tax advantages on the table. Retirement accounts offer one of the clearest ways to reduce taxable income. Contributions to accounts such as a 401(k) or certain IRAs can lower your current tax bill while helping you build long-term savings.

The mistake often comes from waiting too long or not reviewing contribution limits each year.

How to avoid it:

  • Max out employer retirement plans when possible
  • Review annual contribution limits early in the year
  • Explore additional retirement options if income is high

A clear savings strategy can help reduce taxes today while strengthening your retirement plan.

Overlooking the Impact of the SALT Deduction Limit

The federal tax code limits the deduction for state and local taxes. This is often called the SALT deduction. For many high-income New Yorkers, property taxes and state income taxes far exceed the current deduction cap. As a result, a large portion of those taxes may not be deductible on a federal return.

Some taxpayers assume they will receive a bigger deduction than the law allows. That can throw off tax projections.

How to avoid it:
Build tax planning around the deduction limits that exist today. The financial professionals at DeSantis, Kiefer, Shall & Sarcone can help estimate how much of your state and local taxes will actually be deductible.

Waiting Until Tax Season to Start Planning

A lot of tax decisions happen long before April. Waiting until tax season limits your options. By the time you gather documents and file your return, many tax-saving strategies are no longer available.

This includes actions like:

  • Adjusting investment strategies
  • Timing certain income or deductions
  • Reviewing retirement contributions

Tax planning works best when it happens throughout the year.

How to avoid it:
Schedule a tax planning review well before the end of the year. Many high earners benefit from a mid-year check-in to see how income and investments are tracking.

Ignoring Tax Efficiency in Investments

Investments can create hidden tax costs. Dividends, capital gains, and portfolio changes can all affect your tax bill. High-income investors sometimes focus only on performance. Taxes then reduce the final return more than expected. Even small adjustments can make a difference over time.

How to avoid it:

  • Review the tax impact of investment decisions
  • Be mindful of short-term versus long-term capital gains
  • Consider tax-efficient strategies within your overall plan

Investment planning and tax planning work best when they are connected.

Not Reviewing Changes in Income

Income can change quickly for high earners. Bonuses, stock compensation, and business income can shift your tax picture in a big way. If those changes are not reviewed during the year, you may end up with a much larger tax bill than expected.

How to avoid it:
Update your tax projections whenever income changes. This can help you adjust estimated payments, savings strategies, or withholding before problems arise.

The Value of Proactive Tax Planning

High-income earners often face more complicated tax situations. With the right planning, many common mistakes can be avoided. Simple steps like reviewing retirement contributions, monitoring investment taxes, and estimating your full tax picture can make a meaningful difference.

At DeSantis, Kiefer, Shall & Sarcone, tax-aware financial planning is an important part of helping clients protect and grow their wealth. Thoughtful planning throughout the year can help reduce stress during tax season and support long-term financial goals. If you would like guidance on tax planning or your broader financial strategy, speaking with an experienced advisor can be a helpful next step.