Why High-Net-Worth Individuals Need a CPA in 2026
Essential tax strategies, estate planning insights, and compliance guidance for protecting and growing substantial wealth
High-net-worth individuals (HNWIs)—typically those with $1 million or more in liquid assets—face increasingly sophisticated financial challenges in 2026. With the permanence of many Tax Cuts and Jobs Act (TCJA) provisions under the One Big Beautiful Bill Act (OBBBA), along with inflation-adjusted thresholds and heightened IRS focus on affluent taxpayers, professional guidance is critical.
A Certified Public Accountant (CPA) specializing in high-net-worth clients goes beyond basic tax preparation. They provide proactive tax planning, ensure compliance, and help preserve and grow wealth across generations.
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Exclusion
Tax Rate
1. Advanced Tax Planning and Optimization
HNWIs often juggle multiple income streams: capital gains, dividends, rental income, private equity distributions, and international earnings. In 2026, the top federal income tax rate remains at 37%, but phaseouts for deductions and credits can push effective rates higher.
| Tax Rate | Taxable Income Range | Key Consideration |
|---|---|---|
| 10% | $0 – $24,800 | Standard bracket |
| 12% | $24,801 – $100,800 | Standard bracket |
| 22% | $100,801 – $211,400 | Roth conversion sweet spot |
| 24% | $211,401 – $403,550 | QBI deduction phaseout begins |
| 32% | $403,551 – $512,450 | Strategic income timing critical |
| 35% | $512,451 – $768,700 | NIIT threshold exceeded |
| 37% | Over $768,700 | Maximum tax optimization needed |
CPAs implement proven tax strategies for high-net-worth individuals, including:
Tax-Loss Harvesting
Strategically selling investments at a loss to offset capital gains and reduce taxable income by up to $3,000 annually.
Roth Conversions
Converting traditional IRA funds during lower-income years to create tax-free growth and withdrawals in retirement.
Deduction Bunching
Concentrating charitable contributions and other deductions into alternating years to maximize itemized benefits.
Qualified Opportunity Zones
Deferring and potentially reducing capital gains through strategic investments in designated economic zones.
2. Estate Planning and Wealth Transfer
The federal estate, gift, and generation-skipping transfer tax exemption is now permanently set at $15 million per individual ($30 million for married couples) starting in 2026, indexed for inflation going forward.
| Threshold Type | Individual | Married Couple |
|---|---|---|
| Lifetime Estate/Gift Exemption | $15,000,000 | $30,000,000 |
| Annual Gift Exclusion | $19,000 | $38,000 |
| GST Tax Exemption | $15,000,000 | $30,000,000 |
| Estate Tax Rate (Above Exemption) | 40% | |
CPAs help HNWIs capitalize on this generous landscape with sophisticated tools:
- Irrevocable Life Insurance Trusts (ILITs) — Remove life insurance proceeds from taxable estate
- Grantor Retained Annuity Trusts (GRATs) — Transfer appreciation to heirs with minimal gift tax
- Family Limited Partnerships — Enable valuation discounts and controlled wealth transfer
- Charitable Remainder Trusts — Provide income stream while benefiting charity
State Tax Alert: While the federal exemption is now $15 million, residents of states with separate estate or inheritance taxes (such as Massachusetts with its ~$2 million exemption) still need state-level planning strategies. A CPA can help navigate both federal and state requirements.
3. Tax-Efficient Investment Management
From real estate and alternatives to stocks and bonds, HNWI portfolios demand tax-aware oversight. CPAs collaborate with advisors to optimize after-tax returns.
| Holding Period | Tax Rate Range | Strategy Implication |
|---|---|---|
| Short-Term (<1 year) | 10% – 37% | Taxed as ordinary income; avoid when possible |
| Long-Term (≥1 year) | 0% / 15% / 20% | Preferential rates; time sales strategically |
| Collectibles | 28% maximum | Art, antiques, precious metals |
| NIIT Surcharge | +3.8% | Applies above $250K AGI (MFJ) |
4. Compliance, Audit Defense, and Risk Mitigation
High earners face elevated audit risks, particularly for foreign accounts (FBAR/FATCA), cryptocurrency, or complex deductions.
IRS Enforcement Focus Areas for 2026
The IRS has announced increased scrutiny on high-income taxpayers, with audit rates for those earning $1M+ significantly higher than average. Key areas include foreign account reporting, cryptocurrency transactions, large charitable deductions, and pass-through entity income. A CPA provides proactive compliance reviews and audit representation when needed.
| Capability | Specialized CPA | DIY Software |
|---|---|---|
| Multi-state tax optimization | ✓ Comprehensive | ✗ Limited |
| International reporting (FBAR/FATCA) | ✓ Expert guidance | ✗ Not supported |
| Audit representation | ✓ Full defense | ✗ Not available |
| Year-round tax planning | ✓ Proactive | ✗ Filing only |
| Estate/gift tax coordination | ✓ Integrated | ✗ Separate tools |
| Business entity structuring | ✓ Strategic advice | ✗ No guidance |
5. Business Ownership and Executive Compensation
Many HNWIs are entrepreneurs or C-suite executives. CPAs advise on optimal entity structures, deferred compensation plans, executive perks, stock options, and maximizing qualified business income deductions. Integrating business and personal planning creates powerful synergies.
6. Philanthropy and Charitable Giving
With ongoing limits on charitable deductions, CPAs design tax-efficient giving strategies via donor-advised funds, private foundations, or bundled contributions to maximize both impact and tax benefits.
7. Holistic Wealth Management
A HNWI-focused CPA often leads your advisory team, coordinating strategies with financial planners, estate attorneys, and insurance specialists. This ensures comprehensive coverage—from retirement projections to risk management.
Tax Filing & Q1 Planning
File prior year returns, make Q1 estimated payments, review investment gains/losses
Mid-Year Review
Assess income projections, adjust withholding, evaluate Roth conversion opportunities
Strategy Refinement
Review business entity elections, plan charitable giving, assess estate planning needs
Year-End Optimization
Execute tax-loss harvesting, finalize charitable contributions, maximize retirement deferrals
Ready to Elevate Your Wealth Strategy?
In 2026, with complex tax rules and significant exemptions, generic advice or DIY tools won't suffice. Our team—led by a licensed CPA—delivers measurable savings, compliance assurance, and strategic foresight tailored to high-net-worth individuals and business owners.
Or call us directly: (850) 303-2133
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