First Principles x 19th Hole
Engineer Your Tax Advantage
High-income engineers pay more in taxes than almost any other profession. Select a strategy to see how we systematically change that.
Bonus Depreciation Options
Accelerate deductions to slash your taxable income in the year you need it most — particularly powerful for engineers with large W-2 or RSU income spikes.
Cost Segregation
Real Estate Acceleration
- Reclassify building components for faster depreciation
- Front-load 30–50% of property value in year one
- Pairs with real estate professional status
- Offsets passive or active W-2 income
Bonus Depreciation (Section 168)
Equipment & Business Assets
- 100% first-year write-off on qualifying assets
- Ideal if you own a side business or consulting LLC
- Includes software, machinery, vehicles
- Stacks with other deductions in high-income years
Oil & Gas
Intangible Drilling Costs
- Up to 80–100% deduction in year one
- Works against ordinary income, not just passive
- Ongoing depletion allowance on production
- Accredited investor access required
Qualified Opportunity Zones
Capital Gains Deferral
- Defer and reduce capital gains from RSU vesting
- Tax-free growth on new gains after 10 years
- Ideal after large equity event or acquisition
- Active QOZ fund selection is critical
W-2 Spike
Senior engineer receives $300K RSU vest — cost segregation on a rental property offsets $80–120K in taxable income the same year.
Consulting LLC
Staff engineer moonlighting earns $60K consulting — bonus depreciation on equipment reduces net taxable to near zero.
"Depreciation is like reading break on a putt — most engineers ignore it entirely. But when you see it, you can sink shots others leave 6 feet short of the hole."
Qualified & Retirement Plans
Engineers are exceptional savers — but most stop at the 401(k). Stack multiple qualified structures to shelter six figures in income before taxes each year.
Defined Benefit Plan
The Hidden Shelter
- Contribute $100K–$330K/year pre-tax
- Ideal for engineers with side income or S-corps
- Actuarially calculated — grows with age
- Stacks on top of existing 401(k)
Cash Balance Plan
Pension-Style Power
- Hybrid DB plan with defined account balance
- Contribution limits increase significantly with age
- Engineers 45–60 can shelter the most
- Converts to rollover IRA at retirement
Mega Backdoor Roth
Tax-Free Compounding
- Bypass income limits on Roth contributions
- Mega backdoor: up to $43K additional via 401(k)
- Grows and withdraws completely tax-free
- Confirm plan allows after-tax contributions
Deferred Comp (NQDC)
Defer Your Peak Income
- Defer W-2 income to lower-tax retirement years
- Available through employer NQDC plans
- Pairs with charitable planning for tax-free exit
Age 48, $450K income
Staff engineer with consulting LLC adds a defined benefit plan — contributes $265K pre-tax, reducing effective taxable income by 59%.
FAANG Employee
Mega backdoor Roth through 401(k) after-tax bucket adds $43K/year of tax-free compounding on top of standard contribution limit.
"Most engineers play one club — the 401(k). But the players who shoot low know you need the whole bag. Stack your plans like you'd stack your course management."
Charitable Structures
The most overlooked tax strategies for engineers. Done right, charitable planning creates a deduction today, tax-free income for life, and a lasting legacy.
Donor Advised Fund (DAF)
The Simple Starter
- Contribute appreciated stock to avoid capital gains
- Full deduction in the year of contribution
- Distribute to charities on your own timeline
- Tax-free growth inside the fund
Charitable LLC (CLLC)
The Power Structure
- Premium finance strategy inside a charitable LLC
- Generates large upfront deductions via management fees
- Tax-free death benefit passes to heirs and charity
- Best suited for $500K+ income earners
Charitable Remainder Trust
Income for Life
- Convert appreciated assets into lifetime income stream
- Avoid capital gains at the time of sale
- Partial charitable deduction in year of funding
- Remainder passes to charity, reducing the estate
Private Foundation Combo
Legacy Architecture
- Control how charitable dollars are invested
- Family involvement and multi-generational planning
- Deduction up to 30% of AGI with 5-year carryforward
- Pairs with life insurance for wealth replacement
RSU Vesting
Engineer with $200K vesting event contributes $80K of appreciated shares to a DAF — eliminates capital gains and takes a full deduction.
$700K+ Earner
Charitable LLC generates $300K+ deduction via management fee structure while funding a tax-free life insurance benefit for the family.
"Great charitable planning isn't about giving money away — it's about redirecting dollars that would have gone to taxes toward your values, your family, and your legacy. That's a birdie on every hole."