Tax strategies: How to save clever when investing!

Tax strategies: How to save clever when investing!

The question of the optimal tax strategy concerns many investors, regardless of whether they are in their professional life or are already retiring. In an interview with Bill Harris, the former CEO of PayPal and intuit, Jim Puplava from Financial Sense Wealth Management spoke over ten effective strategies for tax reduction that can be useful for investors of all income levels. Harris, also author of the book "The Investment Tax Guide: How to Slash Your Taxes", emphasizes the importance of well -thought -out tax planning management.

Early attention should be placed on the 401 (K) contributions. Employer matches are quasi free money, so work couples and employees should deposit in their 401 (K) until full match. After this first step, it is advisable to invest in traditional or Roth Iras that offer more flexibility and lower costs. For investors who strive for a tax -optimized distribution of assets, the correct placement of their assets is crucial: interest rate -generating systems belong in tax -based accounts.

Tax loss calculation and deductions

Another important topic is tax loss calculation. Investors who have taxable accounts should strategically realize losses in times of market declines in order to reduce their taxable income. This strategy is particularly advisable for investors with significant assets in taxpayers, while for most investors with tax-protected systems, the loss of loss is less sensible, as is less sensible, as on Morningstar is highlighted. There it is also mentioned that a conversion of traditional Iras in Roth Iras can be a clever strategy.

The Roth Iras are enjoying growing popularity because they enable tax-free withdrawals in retirement. This is particularly advantageous for investors who expect higher tax rates if they retire. However, the conversion of taxable accounts into Roth accounts can initially bring tax burdens: the conversion of a 401 (K) account over 900,000 US dollars could significantly increase taxable income, which could lead to a higher tax burden. A staggered conversion can offer a solution here to alleviate the tax burden and achieve the financial goals, such as various specialist articles, including IT-BoltWise , recommend.

optimization through strategic action

The further recommendations of Harris include donations to avoid valued securities in order to avoid capital gains taxes, and the use of donation funds (DAFS) for immediate tax deductions and more flexible distribution options. High earners who are unable to invest directly in Roth Iras also have the option of considering so-called backdoor Roth IRA conversions. These conversions can pay off in the long term, even if they initially cause high costs at short notice.