The Hidden $500k–$600k Tax Trap: Ross Atefi on Why High Earners Need to Plan Now

Taxes in America are rarely static. For high earners in particular, the rules are a shifting maze of deductions, exemptions, and thresholds that can change with the stroke of a legislative pen. While many taxpayers focus on the big-ticket rates, some of the most financially impactful changes happen in the fine print, changes that can cost or save tens of thousands of dollars if one knows where to look.

One of the latest examples comes from the newly passed One Big Beautiful Bill, which makes a major adjustment to the State and Local Tax (SALT) deduction. This deduction, which allows taxpayers to reduce their federal taxable income by the amount they pay in state and local taxes, was capped at $10,000 under prior law. This year, that cap quadrupled to $40,000, a potential windfall for residents of high-tax states like California and New York.

While the higher cap looks like good news, Ross Atefi, founder of Yatra Wealth Design, warns that for high earners, it's a double-edged sword. "The new tax law raises the SALT deduction, which sounds like good news, until you make over $500,000," he explains. "That's when the extra deduction quickly disappears, pushing federal tax rates above 45 percent, and over 50 percent in some states."

Here's how it works: Between $500,000 and $600,000 of taxable income, the SALT deduction phases out rapidly, from $40,000 down to $10,000. This creates a concentrated zone where the marginal tax rate on each extra dollar spikes, well above what most taxpayers expect. For someone in that range, more than half of each additional $1,000 earned could go to taxes.

The good news is that with proper planning, it's possible to sidestep much of the loss. Strategies can include front-loaded deductions like investing in assets, such as certain oil and gas programs that deliver large first-year write-offs. Advanced retirement plan strategies include using profit-sharing, individual 401(k)s, or cash balance pension plans to shelter more income pre-tax. Businesses can also profit by adjusting how income is distributed or expensed.

If done before year-end, these tactics can pull taxable income below the $500,000 threshold, preserving the full $40,000 SALT deduction and keeping thousands of dollars in a taxpayer's pocket.

In a big firm, you're often working within a rigid framework, sometimes even being nudged toward investments or products that benefit the firm more than the client. However, at a boutique firm, there's no conflict of interest. Furthermore, complex tax maneuvers like SALT demand a nimble, client-focused approach. Atefi believes this is where bespoke advisory firms like theirs have the advantage. He shares, "We choose the exact strategies that serve our clients best."

The difference isn't just about independence, it's about depth of engagement. Large firms may handle thousands of accounts, but boutique practices can dedicate far more time to understanding each client's income patterns, family circumstances, and long-term goals. This attention to detail often makes the difference in spotting and acting on tax law nuances like the SALT deduction phase-out.

Atefi founded Yatra Wealth Design in 2019 after more than a decade in the financial planning industry, including years at a large, well-known firm. He left to become a fully independent fiduciary, legally bound to put clients' interests first.

The name itself, Yatra, comes from the Sanskrit word for a sacred journey, a nod to Atefi's own trek into the Himalayan mountains. "I think of it as guiding my clients on their own sacred journeys," he says. "'Wealth' isn't just about money, it's about time with your family, health, and all the things you value. 'Design' reflects that we take a multifaceted approach, investments, taxes, estate planning, everything is connected." The company follows three phases, yet each caters to individual client needs.

This focus on adaptability is personal for Atefi. Growing up, financial instability was a constant presence, fueling his desire to help others create lasting stability. He says, "I love the analysis side of finance, but I also love working with clients. Helping them gain clarity and control over their finances is deeply rewarding."

The expanded SALT deduction may seem straightforward, but for high earners in the abovementioned range, it introduces a costly trap. With proactive planning, however, that trap can be avoided and even turned into an opportunity for tax savings.

For Atefi, that's exactly why firms like Yatra Wealth Design exist. "We design our clients' financial plans to adapt to changes like this, so they can focus on their lives without missing key opportunities," he says. "From the first conversation to the fine-tuning years later, we're with them every step of the way."