Using “Asset Location” to Reduce Your Tax Bill

Growing your portfolio isn’t only about selecting the right investments; it’s also about maximizing how much of the gains you can keep and minimizing how much you have to give to the government. Therefore understanding the tax implications of your investments is a key part of taking control of your wealth. Fully utilizing tax-advantaged accounts (such as 401k and IRA accounts) is important, but it’s not the only step in achieving better after-tax investment returns.

Topics: Blog Taxes Asset Location

It’s Not Too Late for a 2014 IRA Contribution

Taking advantage of tax-advantaged accounts, such as 401(k) and IRA accounts, can be one of the most effective tactics to get on track to reach your retirement goal. But if you forgot to make an IRA contribution for the 2014 tax year, it’s not too late. You actually have until tax day (April 15th) of this year to make an IRA contribution for 2014.

Like with most issues relating to taxes, the rules relating to IRA contributions aren’t exactly simple. But here are the basics:

Topics: Blog IRA Taxes

Reducing Your Capital Gains Tax Bill

The end of the calendar year can be a good time to try to reduce the amount you have to pay in taxes. You have to pay capital gains taxes on your investments that have been sold for a profit during the year (at least in standard investment accounts; you don’t have to worry about this in tax-advantaged accounts such as 401k, IRA, and 529 accounts). But if you also have investments that have declined in value, you could potentially sell some of these before the year ends to create “capital losses” to offset the capital gains. This tactic, called “tax-loss harvesting,” can lower the amount you pay in taxes and therefore boost the size of your portfolio over time.

Topics: Blog Taxes

How Much Should You Put Into Retirement Accounts?

Taxes can be one of the main drags on the growth of your portfolio. That’s why tax-advantaged accounts such as 401(k) and IRA accounts can be such a boon when you’re saving for retirement. But how much should you put into these accounts as opposed to regular taxable accounts? The answer is “as much as you can” in order to minimize your tax bill, though there are a couple key constraints on how much you “can” allocate to these accounts.

Topics: Blog IRA Taxes Retirement 401K

The Pros and Cons of MLPs

Most stocks are fundamentally the same kind of investment: they’re shares of ownership in a corporation. There are a few exceptions, however. One is “Master Limited Partnerships” (MLPs), which are popular among many investors because they tend to have very high yields. MLPs trade on stock exchanges just like other stocks, but there are important differences from both a legal perspective and an investment perspective.

Topics: Blog Taxes Yield MLP