u/Maria_Nauma_Finance

I was working through ESSB 6346 (WA's 9.9% tax on income over $1M, starting 2028) and I think I found a strange edge case. Please check my reading.

• WA already has a capital gains tax: 0% on the first ~$278k of long-term gains, 7% above that, 9.9% over $1M of gains.
• The new income tax is 9.9% on income over $1M (federal AGI, with tweaks).
• To avoid double taxing gains, the bill first removes all long-term gains from your income, then adds back the WA-taxed gain plus the $278k  deduction. See section 302(3) here: https://lawfilesext.leg.wa.gov/biennium/2025-26/Htm/Bills/Session%20Laws/Senate/6346-S.SL.htm

Here is the problem I see. The bill says the add-back "applies only to taxpayers owing tax under chapter 82.87 RCW" (the capital gains tax). So:

• Gain under ~$278k: you owe no capital gains tax, nothing gets added back, so the gain never touches the income tax.
• Gain even $1 over: you owe capital gains tax, so the *whole* gain gets added back, including the first $278k that was previously free.

Example (single filer, $1.2M wages, 2025 deduction figure):

Scenario 1

• Long-term gain: $277,000
• Capital gains tax: $0
• Income tax base: $1,200,000
• Total WA tax: $19,800

Scenario 2

• Long-term gain: $279,000
• Capital gains tax: $70
• Income tax base: $1,479,000
• Total WA tax: $47,421

A $2,000 bigger gain costs about $27,600 more in tax, because 9.9% x $279,000 of extra income suddenly counts. It only affects people whose other income is already over $1M.

Caveats: I'm not a tax pro, this ignores the other credits in the bill, and the tax faces a repeal vote in Nov 2026. I found this while building the rules into a planning calculator, and I checked the wording against the session law text rather than a summary.

Does this match how you read Sec. 302(3)?

View Poll

I was working through ESSB 6346 (WA's 9.9% tax on income over $1M, starting 2028) and I think I found a strange edge case. Please check my reading.

• WA already has a capital gains tax: 0% on the first ~$278k of long-term gains, 7% above that, 9.9% over $1M of gains.
• The new income tax is 9.9% on income over $1M (federal AGI, with tweaks).
• To avoid double taxing gains, the bill first removes all long-term gains from your income, then adds back the WA-taxed gain plus the $278k  deduction. See section 302(3) here: https://lawfilesext.leg.wa.gov/biennium/2025-26/Htm/Bills/Session%20Laws/Senate/6346-S.SL.htm

Here is the problem I see. The bill says the add-back "applies only to taxpayers owing tax under chapter 82.87 RCW" (the capital gains tax). So:

• Gain under ~$278k: you owe no capital gains tax, nothing gets added back, so the gain never touches the income tax.
• Gain even $1 over: you owe capital gains tax, so the *whole* gain gets added back, including the first $278k that was previously free.

Example (single filer, $1.2M wages, 2025 deduction figure):

Scenario 1

• Long-term gain: $277,000
• Capital gains tax: $0
• Income tax base: $1,200,000
• Total WA tax: $19,800

Scenario 2

• Long-term gain: $279,000
• Capital gains tax: $70
• Income tax base: $1,479,000
• Total WA tax: $47,421

A $2,000 bigger gain costs about $27,600 more in tax, because 9.9% x $279,000 of extra income suddenly counts. It only affects people whose other income is already over $1M.

Caveats: I'm not a tax pro, this ignores the other credits in the bill, and the tax faces a repeal vote in Nov 2026. I found this while building the rules into a planning calculator, and I checked the wording against the session law text rather than a summary.

Does this match how you read Sec. 302(3)?

View Poll

One of the best parts of building Nauma has been hearing how people actually plan their financial lives. Some of our recent improvements came directly from conversations with our users and early adopters.

We're a small team, which means every feature is a tradeoff. Here's what's currently on our roadmap:

1 - ACA & IRMAA tax planning
2 - Trust planning
3 - QCD support
4 - Smarter contribution management
5 - Better cash-flow planning
Now we're curious...

What's the one feature that would make Nauma significantly more useful for you personally?

- "Always max your 401(k)"

- "Pay off all debt first"

- "Buy and hold forever"...

Which popular advice didn't fit your situation, and what did you learn instead?

When planning your Roth conversions, do you prefer using amounts calculated by a tax optimizer or another tool that claims to generate an optimal year-by-year strategy? Or do you prefer entering the conversion amount yourself for each year?

Blindly trusting a black-box algorithm for a multi-decade projection feels risky, but manual planning is a lot of spreadsheet overhead.