Hi guys and ladies,
This post is to help me/us learn about legal tax saving(s) strategies to limit taxes to as close to zero as possible.
-The mega company that I work for has a 401k (Traditional and Roth; 6% match immediate vested only in Traditional 401k and has S&P500 index but no option to invest in TSLA... this post is not about which stock is the right choice but only the tax savings strategies); I contribute 6% to the Traditional 401k for the match and 1% to Roth 401k (did not increase this one further because it does not invest in TSLA and I truly believe that whenever Tesla releases Full Self Drive (FSD) the stock will 10x (that might be excessive but it'll do MUCH BETTER than the tax savings... it already did that for purchases before the 5/1 split)
-I'm eligible for Roth IRA ($500/month investment maxed out in 2020 and continue that strategy until I can max it out faster for better returns)
-HSA ($3600 max per year with triple tax savings, recording medical expenses in Excel file, and believe no taxes for any withdrawals after 65(?) or for medical purposes
-Brokerage account (obviously taxable and, for me, currently contains 64 TSLA stock that has made 100+% returns; had many (not all) stocks since before the 5 for 1 split and practice DCA contributions
-Crypto (taxable +/-$24k Etherium (8.77) and $5k Bitcoin (.08)... this is newest investments and made around $3-5k profit so far, might buy taxbit.com ($50) this year to know exact profits and will try to keep better track of each investment; not planning on selling them for a while so taxbit.com might not be needed yet)... I sold my +/-72 MSFT taxable stocks to buy the crypto and it's already paid for the taxes and over double that. I'll still have to pay the MSFT taxes for 2021 taxes.
The overall question is how do I legally invest more money and legally avoid paying taxes (while maximizing returns... figure this part is obvious)?
-Possibly Roth conversions and pay taxes now on the 38 Traditional IRA TSLA stocks and 2 short-term Square stocks? (maybe not all of it but some of it; right now know that I already have a higher taxable 2021 due to selling 72 MSFT [think $1,000-$1500 taxes... only 5 short-term, 22 or 24% taxes, and the rest long-term, 15% taxes] and not sure if now is the time to do the Roth conversion)
-Possibly use tax-harvesting (not familiar with it and might not work well with my non-overly-diversified stock portfolio... I have multiple years to let the stock grow and fully believe in it; when TSLA dips in price how do I sell and purchase it again without causing a wash-rule besides waiting 30+ days and missing whatever happens in that time)
-Real estate, really want to do this but invested almost entirely in stocks and will have to sell a bunch which is not my plan; primary home (+/-$110k in equity; still +/-$350k mortgage); I'm in Paralysis by Analysis... lots of studying it and investing to increase networth but not taking the most important step of "action"... as Netflix founder/CEO said in an interview, no idea is a good idea until it is put into action (not quoted) because we all think we have good ideas until we see how well they work.
Now, I feel like I am just typing and typing. Will you please let me know your thoughts on how to maximize returns through reducing/eliminating taxes legally?
This post is to help me/us learn about legal tax saving(s) strategies to limit taxes to as close to zero as possible.
-The mega company that I work for has a 401k (Traditional and Roth; 6% match immediate vested only in Traditional 401k and has S&P500 index but no option to invest in TSLA... this post is not about which stock is the right choice but only the tax savings strategies); I contribute 6% to the Traditional 401k for the match and 1% to Roth 401k (did not increase this one further because it does not invest in TSLA and I truly believe that whenever Tesla releases Full Self Drive (FSD) the stock will 10x (that might be excessive but it'll do MUCH BETTER than the tax savings... it already did that for purchases before the 5/1 split)
-I'm eligible for Roth IRA ($500/month investment maxed out in 2020 and continue that strategy until I can max it out faster for better returns)
-HSA ($3600 max per year with triple tax savings, recording medical expenses in Excel file, and believe no taxes for any withdrawals after 65(?) or for medical purposes
-Brokerage account (obviously taxable and, for me, currently contains 64 TSLA stock that has made 100+% returns; had many (not all) stocks since before the 5 for 1 split and practice DCA contributions
-Crypto (taxable +/-$24k Etherium (8.77) and $5k Bitcoin (.08)... this is newest investments and made around $3-5k profit so far, might buy taxbit.com ($50) this year to know exact profits and will try to keep better track of each investment; not planning on selling them for a while so taxbit.com might not be needed yet)... I sold my +/-72 MSFT taxable stocks to buy the crypto and it's already paid for the taxes and over double that. I'll still have to pay the MSFT taxes for 2021 taxes.
The overall question is how do I legally invest more money and legally avoid paying taxes (while maximizing returns... figure this part is obvious)?
-Possibly Roth conversions and pay taxes now on the 38 Traditional IRA TSLA stocks and 2 short-term Square stocks? (maybe not all of it but some of it; right now know that I already have a higher taxable 2021 due to selling 72 MSFT [think $1,000-$1500 taxes... only 5 short-term, 22 or 24% taxes, and the rest long-term, 15% taxes] and not sure if now is the time to do the Roth conversion)
-Possibly use tax-harvesting (not familiar with it and might not work well with my non-overly-diversified stock portfolio... I have multiple years to let the stock grow and fully believe in it; when TSLA dips in price how do I sell and purchase it again without causing a wash-rule besides waiting 30+ days and missing whatever happens in that time)
-Real estate, really want to do this but invested almost entirely in stocks and will have to sell a bunch which is not my plan; primary home (+/-$110k in equity; still +/-$350k mortgage); I'm in Paralysis by Analysis... lots of studying it and investing to increase networth but not taking the most important step of "action"... as Netflix founder/CEO said in an interview, no idea is a good idea until it is put into action (not quoted) because we all think we have good ideas until we see how well they work.
Now, I feel like I am just typing and typing. Will you please let me know your thoughts on how to maximize returns through reducing/eliminating taxes legally?
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