LGBTQ+ financial planning for Capitol Hill

Capitol Hill households skew tech, healthcare, and nonprofit, and the compensation pattern is distinctly Seattle: a moderate base salary carrying a large RSU component from Amazon, Microsoft, or a mid-size tech employer. Washington has no state income tax, which makes exercising and vesting cheaper than in California — but it also means the entire tax plan lives at the federal level, where a big vest can push you into the 3.8% net investment income tax and the top bracket in the same year.

Two Washington-specific issues catch people. First, the state's 7% capital gains excise tax applies to long-term gains above an annual standard deduction — RSU sales at vest are usually unaffected because there's little gain, but a concentrated position sold years later is squarely in scope. Second, Washington has its own estate tax with an exemption far below the federal one ($3 million as of the 2025 update, indexed), so a paid-off Capitol Hill home plus retirement accounts and life insurance can create a state estate tax bill for households that would owe nothing federally.

The practical work: a written sell-on-vest policy so concentration doesn't accumulate by default, tax-loss harvesting to offset the state capital gains tax, and estate documents built around the Washington exemption — including credit shelter or disclaimer planning for married couples who would otherwise waste the first spouse's exemption.