Want to save on taxes? Matt and I discuss 8 different strategies that can help you keep more money in your pocket. We cover the first 3 tips in this first podcast, followed by 5 more in the next podcast.
- Use Index funds over actively managed funds. This is generally great advice, but also better at saving on taxes due to less turnover of holdings.
- Use ETFs instead of mutual funds. ETFs are a unique “wrapper” that avoids you from paying taxes on interest and dividends.
- Hold the right asset in the right account. Tax-deferred and Tax-free accounts (401k, IRA, etc) are great for bond funds because you avoid paying taxes on the interest and dividends each year.
- Tax-loss Harvesting. Make lemonade out of lemons by intentionally taking a loss and deducting it from your taxes or offset other gains and pay no tax.
- Tax-Lot Management. It’s important to sell the correct shares so that you take advantage of short-term or long-term gains/losses in your account.
- Savvy Rebalance. Use additional funds or tax-deferred/free accounts to do your rebalancing and avoid paying capital gains.
- Long-term Investing Horizons. Long-term capital gains are taxed at a lower rate than short-term. Invest for the long run!
- Charitable Giving. Donating appreciated assets helps you avoid paying taxes on capital gains.
Find out more about Mike at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/
