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Do You Consider Taxes as You Invest?



A few astute moves could help promote a better after-tax return.


As you weigh risk vs. return, you may risk taking an eye off taxes. A focus on tax efficiency could help you improve the effective yield from your portfolio.

You can try to cut or delay taxes linked to investing.

Consider placing the most tax-efficient investments you have

in taxable accounts, and your least tax-efficient investments in tax-advantaged ones. In your taxable accounts, consider investments that are passively, instead of actively, managed. Active Management involves more frequent buying and selling of assets, tends to generate higher transaction costs, and will have tax consequences to moving positions frequently.


Think about directing investable assets into accounts that offer the potential for tax-deferred growth and tax-free withdrawals, such as Roth IRAs. At the very least, look into your tax-deferred retirement accounts such as 401(k)s or 403(b)s.


Tax-loss harvesting can be a smart move any time of year.


By selling securities for less than what you originally paid for them, you incur capital losses. These net losses can offset short-term capital gains, and you can deduct them against regular income for tax savings. You can deduct as much as $3,000 in capital losses each year and carry forward additional

losses to the following tax year.


You just have to remember two things. One, tax-loss harvesting is only allowed in taxable accounts. Two, you must abide by the “wash sale” rule: you cannot claim a loss on a security if you buy the same or

substantially identical security within a 60-day window of liquidating your shares.


Give us a call today. We are happy to help work through what is best for your financial needs.


Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Longleaf Wealth Management Group, LLC and LPL Financial are separate entities.

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