As we near the end of the year, it’s important to consider strategies to maximize after-tax returns on your investments. The year 2024 has been a strong one for stocks, with the S&P 500 up nearly 18%. With this growth, it’s crucial to be mindful of the tax implications on your portfolio.
At Extreme Investor Network, we understand the importance of proactive tax planning to preserve your investment returns. Chief Investment Officer Nathan Hoyt from Regent Peak Wealth Advisors in Atlanta emphasizes the need for a strategic approach in a market filled with uncertainty.
One key strategy to reduce your tax bill is tax loss harvesting. By selling underperforming assets in your taxable account, you can offset capital gains and potentially reduce your tax liability. Vanguard’s Joel Dickson highlights the benefits of tax loss harvesting in times of market volatility.
Another important consideration is asset location. Reviewing where you hold certain assets can help minimize taxes as your investments grow. James Shagawat, a certified financial planner at AdvicePeriod in Paramus, New Jersey, recommends placing assets that generate ordinary income in an IRA, while stocks and tax-free municipal bonds may be better suited for taxable brokerage accounts.
For generous investors looking to make charitable donations, donating appreciated stock can be a tax-efficient strategy. Malcolm Ethridge, a financial advisor at CIC Wealth in Rockville, Maryland, suggests utilizing donor advised funds to maximize tax deductions and avoid capital gains taxes on highly appreciated positions.
At Extreme Investor Network, we provide unique insights and strategies to help you navigate the complex world of investing and tax planning. Stay ahead of the game with our expert advice and make the most of your investment opportunities.