What is Tax-Smart Investing, Anyway?
Definition: Tax-Smart Investing offers strategies to help you pay less tax and keep more of what you make, using CPA-advised wealth management.
Despite tax reform, tax-smart investing still matters
While the 2017 Tax Cuts and Jobs Act made dramatic changes to much of the tax code, the tax rates and income thresholds for taxes on many investments were virtually unchanged. Tax rates were lowered for wages, interest income and short-term capital gains, but they barely moved for long-term capital gains and qualified dividends.
Tax on investments can be a factor in both positive and negative return years. The power of tax-smart investing lies in reducing tax drag in up, down and flat markets. Taxes on investments can be managed through active tax-loss harvesting year-round, minimizing wash sales, managing holding periods and focusing on qualified versus non-qualified dividend distributions. These tools both lower tax liabilities today and allow for additional portfolio growth over the long run.
Capital gains, net investment income, 529 savings plans, Section 199A deductions, retirement plans and wealth transfer planning all are strategies to offer in tax-smart investing. You might want to consider REITS as part of your portfolio, because right now their operating income have a tax benefit of 20% we call it a 20-off coupon.
Tax Planning Tactics
Every year, and sometimes several times a year, there are changes in tax law at the federal level that impact how we look at your portfolio. This leads to a new perspective about how we need to diversify your assets and how we’re going to combine them so that you will pay less taxes when it comes time to prepare your tax return.
Tax Smart Investing is about tax efficiency in investment planning, and it’s also about your estate plan, your debt plans, your education plans, special needs you might have in your family, your insurance, or creating your will. We look at every aspect of your wealth management, every transaction in your life, and identify what we can change to make your resources grow.