Tax-Efficient Investing

[Elon_Brannstrom]

Hi! I've been investing for a while, but recently, I've been focusing more on tax efficiency. With rising tax rates and potential changes to the tax code, it seems like a crucial element of any long-term strategy. Does anyone here have experience with tax-efficient investing? What are the best practices you've found? I’m particularly interested in managing capital gains and optimizing for retirement accounts.

 

[BryceVolt]

Great topic, OP. I’ve been focusing on this for years. Tax-loss harvesting is a game-changer - selling losing investments to offset gains has saved me thousands. And of course, maxing out Roth IRAs is a no-brainer if you qualify. It’s all about keeping more of what you earn.

 

[VortexRogue17]

I’m just getting started with this, but I’ve read that ETFs are better for taxes because they don’t create as many taxable events compared to mutual funds. Is that true? Should I also look at bonds, or are they too tax-heavy for small investors like me?

 

[Dana.Joy]

Yes, ETFs are good, but don't overlook dividend-paying stocks. I focus on qualified dividends since they’re taxed at a lower rate. I’ve also been moving dividend stocks into my IRA to avoid paying taxes on payouts until retirement. It’s been a good way to grow my income without losing a chunk to taxes every year.