How to get more tax protection?

camberiu

Recycles dryer sheets
Joined
Jul 12, 2005
Messages
147
OK,

So after all my expenses, I still have a couple thousand dollars left every month. I already max out my 401K and my Roth IRA contributions. I was putting my money on several ETF's, but the dividends are adding up and increasing my taxable income. Are there any other investments that I should consider to minimize my tax exposure? I am aware of government bonds, but the return on those are pretty lame right now. Anything else that I am missing? Please advise.
 
Don't let the tax tail wag the investment dog. Maximize after-tax risk-adjusted return, don't minimize taxes.

Or there is always Beev3r Cheeze futures. The capital losses they generate will nicely offset your other taxable income. :D
 
What about tax-free state/municipal notes/bonds? There are some that renew at periodic intervals and throw off ~4% tax free.
 
camberiu said:
...
I was putting my money on several ETF's, but the dividends are adding up and increasing my taxable income. Are there any other investments that I should consider to minimize my tax exposure?

We've got the same problem. I am selling my Dodge&Cox balanced which I bought before they closed. I intend to cut back to the minimum allowed for that fund in case I want to get back in the future. All my fixed income assets (except emergency fund) will then be in my tax-deferred accounts. But those ETFs like SPY, MDY, IWM, EEM, and PID do put out a chunk of dividends each year (no cap gains distributions though). The dividends may thwart my plan to convert tIRA assets to Roth IRAs tax-free in the future.

Perhaps a tax-managed Vanguard fund is in order? I will have to look into that.
 
LOL! said:
All my fixed income assets (except emergency fund) will then be in my tax-deferred accounts.

Any recommendations for fixed income emergency fund stuff? Right now mine is in Fidelity Tax Free MM...
 
What kind of Insurance do you have? I'm knocking my AGI down $5,150 bucks by maxing out my HSA (employer kicks in $500).
 
Stocks that have no dividends. You can keep them tax defered until you die. Ibonds used to be great and tax defered, but I don't think they are competitive now though.
 

Latest posts

Back
Top Bottom