The Bogleheads' Guide to Investing (2nd Edition) by Bogle John C. Larimore Taylor Lindauer Mel LeBoeuf Michael & Taylor Larimore & Michael LeBoeuf & John C. Bogle

Author:Bogle, John C., Larimore, Taylor, Lindauer, Mel, LeBoeuf, Michael & Taylor Larimore & Michael LeBoeuf & John C. Bogle [Bogle, John C., Larimore, Taylor, Lindauer, Mel, LeBoeuf, Michael]
Language: eng
Format: mobi
ISBN: 9781118922361
Publisher: Wiley
Published: 2014-08-02T00:00:00+00:00

We suggest 14 tax-reducing ideas for tax-savvy investors. Most are easy to understand and to implement. We can think of no better way for most taxpayers to maximize their after-tax returns.

Use tax-advantaged accounts (401(k), 403(b), IRAs, 529 tuition plans, etc.).

Buy fund shares after the distribution date.

Place tax-INefficent funds in retirement accounts, and tax-Efficient funds in taxable accounts.

Use tax-managed or tax-efficient index funds in taxable accounts.

Avoid balanced funds (stocks and bonds) in taxable accounts.

Keep taxable fund turnover low to avoid capital-gains taxes.

Avoid short-term gains by holding for more than 12 months.

Sell losing shares before year-end (tax-loss harvest).

Sell profitable shares after the new year (to delay tax payment).

Determine the most favorable tax-basis method before selling fund shares.

Consider municipal bonds and U.S. Savings Bonds for taxable accounts.

During years of low income, consider converting to a Roth.

Consider gifts to charities of securities with large capital gains.

Appreciated holdings in taxable accounts are capital gains and income tax free if left to heirs.