The Tax Move Nobody Explains
No jargon, no fear-selling — just the handful of structural decisions that quietly decide how much of your money you actually keep.
Guide · 8 March 2026 · 8 min read
The number was $160,000.
Not $160,000 in deductions missed. Not a mistake anyone had made. Tax paid above what the same income — structured differently, a decade earlier — would have cost. The man sitting across from me in that conference room had built something real, earned well every year, and nobody had ever sat him down for the conversation that actually mattered.
He wasn't unusual. He was the rule.
Deductions are the tidying up. The real action — the stuff that determines how much of your money you keep over a lifetime — is structural. It's decided long before March. It's how you're set up to earn, hold, and time income. The filing is just paperwork on top of that structure.
Filing season is already too late
When people say "tax planning," they mean: reviewing the year that already happened, finding legitimate expenses to claim, maybe a retirement contribution before the deadline.
That's tax filing. Planning implies control over decisions that haven't been made yet — and by the time you're with a shoebox of receipts in March, most of the structural ones are locked.
Real tax planning is the decision about which account to hold an asset in before you buy it. It's whether consulting income should flow through a company or arrive as personal income. It's the choice of when to realise a gain. These decisions sit upstream of everything else. Once income has landed in a particular form, in a particular year, your options narrow considerably.
The structural decisions are fewer than people expect. The gap they create, compounded over time, is not.
Your income type matters more than your deductions
Different income types are taxed differently — in essentially every tax system in the world.
Employment income, a salary, tends to sit at the top of the rate schedule and gets captured at source. In the UK, higher-rate income tax runs at 40–45%. Capital gains on most assets land at 18% for basic-rate taxpayers or 24% at higher and additional rates. Business income, handled through an entity, can offer real flexibility in both timing and categorisation.
I'm not suggesting you engineer your entire life around tax rates — that's a way to make bad decisions for good-looking reasons. But understanding which part of the code you're operating in, and making a deliberate choice rather than accepting whatever your employer sets up by default, is a different kind of awareness.
The wealthiest individuals I dealt with at Goldman rarely paid the effective rate you'd expect given their income. Not because of anything exotic. Because their income mix looked different from a salaried professional's. They held assets over time, earned through structures, timed distributions deliberately. Understanding that distinction is useful even if your situation is much simpler. It tells you where the leverage points actually are.
Who earns the money changes what you owe
Whether income flows to you personally or through a business entity is one of the highest-leverage structural questions most people never ask before they need to.
A business structure — the specific form varies by jurisdiction — can create flexibility in how and when you pay yourself. It can allow money to stay inside the entity at a lower rate while it grows. It can provide genuine deductions for costs you'd be paying as personal expenses anyway. In some situations it enables income-sharing across family members who are legitimately involved.
None of this is complicated. It's how most business owners operate once someone explains it to them. The people who'd benefit simply never had the conversation.
One thing I'll say plainly: entity structures carry real costs and compliance obligations, and they vary enormously across countries. When I moved from Brooklyn to Zürich, my own structure had to be reconsidered entirely — local advice, from the start, before I touched anything. What makes sense in one jurisdiction can be actively counterproductive in another. The principle is universal. The execution is local. This is one of the few places where I'll say without hesitation: find someone who actually knows the tax law where you live. Not someone who assumes it works the same everywhere.
The year income appears is sometimes a choice
The tax year is fixed. What lands on one return stays there. But you have more control over when income appears — and in what form — than most people realise.
Selling an asset with a gain: the year you recognise it matters. In the UK, your CGT rate is 18% or 24%, set by your income band in the year of disposal — not by how long you held the asset. Realise a gain in a lower-income year and the rate shifts. Taking distributions from a business in a high-income year versus a lower one means the same money taxed at different rates. Deferring income into a pension, or leaving it inside a company rather than distributing it, means it compounds on a larger pre-tax base.
Pay the tax now, or pay it later?
You have £10,000 from your salary. You invest it for 25 years, and it grows 7% each year. One question decides everything: does the tax come out at the start, or at the end?
Paying the tax at the end leaves you £13,568 more — that's 42% extra. Why? Simple: for 25 years, the tax money was still yours, and it grew too.
This example uses today's UK pension rules: 40% tax at the start, or roughly 15% at the end (a quarter is tax-free, the rest at the basic rate). Your own rates may differ — and in real life the gap is usually even bigger.
The people who build real wealth over decades aren't usually earning dramatically more than their peers. They're deferring more, compounding more, and thinking carefully about when income appears. Over twenty or thirty years, that discipline compounds as reliably as any investment return does. The maths isn't exciting. The effect is.
The same asset, taxed differently depending on where you keep it
This one surprises people most when they first encounter it.
What you own shapes your after-tax return. But which account holds it can matter just as much. Most investors have multiple account types — some taxable, some tax-deferred, some sheltered entirely (a pension, an ISA, a standard brokerage account). The instinct is to hold the same mix across all of them. But assets that generate regular taxable income — dividends, interest — sit better inside sheltered wrappers, where that income isn't taxed as it accumulates. Tax-efficient investments can sit in a taxable account without much friction at all.
Getting the location right means your overall tax position improves without changing what you hold. It's a structural decision, not a trading one.
Like most structural decisions, it's one you want to make early. Decades of portfolio growth in the wrong account types is hard to unwind without triggering exactly what you were trying to manage.
The question to ask before this year runs away
None of this is advice for your specific situation — I don't know your jurisdiction, your income structure, or what's already in place. For anything beyond the conceptual, find someone who does. A tax professional who thinks structurally — not one who fills in last year's forms and sends you home — is worth the conversation.
What I'd push back on is leaving this until it's urgent. The questions are simple: How am I earning this? When will it appear? What type of income is it? Is there a structure I should be inside before December? The uncomfortable truth is that most advisors you'd hire to answer them are paid by the complexity of what they set up — not by how little you end up paying.
Most people never ask the questions at all.
The man on the thirty-seventh floor asked them about a decade late. His situation had never been particularly complicated. Nobody had told him there was a different set of questions worth asking first.
The answers live in the structure. The structure is decided early.
