Priya
Senior Software Engineer · San Francisco, CA · Age 34
SingleIncome: $400KTech
“I had no idea how much I was leaving on the table.”
The Situation
$280K base + $120K RSU vesting annually
Sells RSUs on vest (sell-to-cover)
No tax planning beyond standard 401(k)
Strategies Identified
1. Mega Backdoor Roth
IRC §415(c), §402A
$15,200
Employer plan allows after-tax contributions. Stack $46K into Roth on top of regular 401(k).
2. LTCG Optimization (RSU Hold Strategy)
IRC §1(h)
$12,600
Hold some RSU shares past 1 year to convert ordinary income to LTCG (15% vs 35%).
3. Tax-Loss Harvesting
IRC §1211, §1222
$8,400
Systematically harvest losses in brokerage account to offset RSU gains.
4. Backdoor Roth IRA
IRC §408A
$6,600
Income exceeds Roth limits. Contribute to traditional IRA, convert to Roth.
Tax Impact
Before
$142,000
→
After
$99,200
Annual Savings
$42,800
30% reduction
Action Steps
1
Check with HR if plan allows after-tax 401(k) contributions
2
Set RSU sell schedule: hold shares past 1 year when possible
3
Open brokerage account for tax-loss harvesting
4
Execute backdoor Roth before April 15
What could you save?
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