• High earners are subject to higher taxation.cash image by Alexey Klementiev from Fotolia.com
  
  The progressive nature of the income tax means that those who earn a higher income are required to pay a higher percentage of their incomes in taxes than those whose incomes are more modest. Of course that does not mean that high earners have to pay more than their share of taxes. There are a number of tax breaks available to those in the upper income strata, and taking advantage of those tax savings can reduce your tax bill by thousands of dollars a year.
  
  

Maximize Your Retirement Savings

• One of the best ways to reduce your taxable income and thus your income taxes is to make the most of the retirement vehicles you have at your disposal. If you work for an employer, putting the maximum allowed into your 401k or 403b provides an excellent tax shelter for your money. Adding additional funds to an IRA can help you save even more. Do not forget about the catch-up provisions of 401k, 403b and IRA plans. These catch-up provisions allow workers who are 50 years of age and older to put additional money into the plans and enjoy even greater cost savings.
  
  Self-employed individuals can take advantage of retirement plans as well. Setting up a SEP-IRA, Simple 401k or Keogh plan allows you to shelter part of your income from the tax man and put money aside for your retirement.
  
  

Take Advantage of Lower Capital Gains Rates

• Structuring your income so that you derive a larger portion from capital gains and a smaller portion from wages is another way to reduce your tax bill. Long-term capital gains can receive preferred tax treatment and be taxed at rates considerably lower than ordinary income. Take a look at your sources of income and try to structure the money you receive so that more of those funds will be taxed at the lower capital gains rate and less will be taxed as ordinary income.
  
  

Charitable Giving

• Many high earners derive great satisfaction from the charitable gifts they make, but those charitable contributions can be valuable at tax time as well. Giving appreciated securities to your favorite charity instead of cash can maximize the value of your gift while minimizing your tax bill. But whether you give stocks, cash or hard goods to charity, always get a receipt for the amount you contribute. High charitable contributions are a big audit flag, so it is important to have complete information for all your charitable giving.