Employment Benefits strategies
13 plays in this category. Each one covers the mechanics, who it fits, and the estimated impact — then generates a deep dive against your own numbers.
- Employment Benefits
Mega Backdoor Roth (After-Tax 401(k) → Roth Conversion)
Contribute up to $46K/yr additional (beyond $23K deferral) to after-tax 401(k), convert to Roth same-day.
$46K/yr additional Roth space = $2M+ tax-free at retirement - Employment Benefits
457(b) Non-Governmental Deferred Compensation (Double 401(k) Space)
Public sector + qualifying nonprofit employees stack a 457(b) alongside their 403(b)/401(k) — 2× annual deferral space.
$23K/yr additional pre-tax + no early-withdrawal penalty - Employment Benefits
409A Non-Qualified Deferred Compensation (Executive Tax Deferral)
Defer unlimited comp to retirement / future years — bypass 401(k) $23K cap on high-income executives.
Defer $100K–$500K/yr from 37% to 24% bracket at retirement - Employment Benefits
ISO Exercise Timing + AMT Optimization
Exercise ISOs early (bargain element = AMT) — pay AMT credit, get long-term cap gains + recover AMT in future.
$100K–$1M+ tax savings on ISO exit - Employment Benefits
83(b) Election on Restricted Stock (Private Co. Founders / Early Employees)
Elect §83(b) within 30 days of restricted stock grant — pay tax on ~$0 value, all future growth is capital gains.
$100K–$10M+ tax savings on eventual exit - Employment Benefits
ESPP 15% Discount + Lookback (Guaranteed 17.6% Return)
Contribute max to §423 ESPP with 15% discount + 6-month lookback = ~26% annualized risk-free arb.
$4K–$8K/yr guaranteed return on $25K ESPP contribution - Employment Benefits
10b5-1 Plan + Costless Collar (Diversify Concentrated Stock)
10b5-1 trading plan lets executives sell during blackouts; costless collar protects downside with no cash outlay.
Downside protection with $0 cost + IRS-safe sale execution - Employment Benefits
Sabbatical / Unpaid Leave Stacking for Tax-Bracket Arbitrage
Take unpaid sabbatical year — convert Traditional IRA to Roth at 12/22% bracket vs 32/35% working years.
10–15% saved per dollar of tax-bracket-arbitrage Roth conversion - Employment Benefits
HSA Triple-Tax Investment (Tax-Free In, Grow, Out)
HSA is the ONLY triple-tax-advantaged account: deductible in, tax-free growth, tax-free out for medical.
$500K–$1.5M tax-free at retirement from $4K/yr contributions - Employment Benefits
Dependent Care FSA ($5,000 Tax-Free Childcare)
Pre-tax $5K/yr for childcare — saves $1,500–$2,000/yr on daycare, camps, after-school programs.
$1,500–$2,000/yr FIT+FICA saved - Employment Benefits
§127 Educational Assistance — $5,250/yr Tax-Free (Incl. Student Loans)
Employer pays up to $5,250/yr for employee tuition OR student loan principal/interest — tax-free through 2025.
$1,500–$2,500/yr FIT + FICA saved per participant - Employment Benefits
§125 Cafeteria Plan — Pre-Tax Employee Benefits
Convert taxable wages into pre-tax benefits (health, FSA, DCFSA, HSA) — saves ~30% FIT + FICA.
$1,000–$5,000/yr per employee - Employment Benefits
ICHRA / QSEHRA — Reimburse Employee Health Insurance Tax-Free
Small biz reimburses employees for individual health plans + medical — 100% deductible, tax-free.
$3K–$8K/yr per employee vs group plan