Four ways we help trim your tax bill

When you choose an advisor to guide your investment, you can focus only on what you can see. Something like investment options, and the expected returns of those investments.

But, while not so obvious, it’s tax optimization for your money’s future growth. It sounds boring, but trust us, taxes can steadily eat up your revenue over the years.

And you may not even notice what’s scary.

Therefore, their salt-worthy advisors take taxes seriously and strive to minimize them whenever possible. These “invisible” victories are hard to find in the moment, so let’s shed light on them now. There are four sophisticated ways to buy, sell and hold stocksAll in the name of trimming your tax bill.

1. Choose which assets go where
2. Rebalance smartly
3. Select the taxable stock you want to sell (or donate)
4. Harvest loss

1. Choose which assets go where

From a tax perspective, there are three main account types when saving for retirement.

• Tax deferral (Traditional IRA, 401(k), etc.), taxes will be paid later.
• Tax-free (Roth Iras, 401(K) etc.), currently taxes are paid.
• TaxableTaxes are currently being paid and later.

Due to their different tax treatment, certain types of investments are more suited to certain accounts. For example, interest from bonds is usually taxed at a higher rate than the stock price, so it makes sense to keep them away from taxable accounts.

This type of asset type based on tax treatment is known as the location of assets rather than splitting them evenly across accounts. And our fully automated, mathematically mature spins It is called tax adjustment.

Once tax adjustments are turned on, the net effect is that your portfolio growth is protected by a loss account. Please don’t Pay taxes when withdrawing funds. To learn more about our tax adjustment features and whether it suits you, take a peek at its disclosures.

2. Rebalance smartly

If your portfolio is too far from your target asset allocation, our technology will automatically rebalance. However, there are multiple ways to achieve that goal. You can simply sell overweight assets and buy underweight assets, but you can achieve capital gains and cause more taxes.

So First, we will utilize the available cash flows that come in and out of the portfolio. For example, when making a withdrawal, we try to minimize your tax blows as much as possible, whilst deliberately liquidating your overweight assets (more details below). And when you deposit money or receive dividends, you use these funds to strengthen your underweight assets.

3. Select the taxable stocks to sell (or donate)

Let’s say there’s no way around that: you say you need to sell your assets. Perhaps cash flow is not enough to perfectly balance your portfolio. Or they are withdrawing funds for a massive purchase. The questions are: Which specific assets should you sell?

The IRS and many brokers follow a simple script called “First In, First Out.” This means that the oldest assets are sold first. This approach is easier for brokers and allows for more advanced avoiding short-term capital gains in taxes. However, it often misses the opportunity to sell assets and sell them and harvest those losses for potential tax benefits.

So our algorithm Taking a more nuanced approach and choosing stocks is called this technology tax in. Taxation is often calibrated to avoid small rebalancing transactions and to seek tax-efficient results.

If you donate shares, you will be exempt from the same logic in the same way as calling it. That’s because when you donate stock, the stock you purchased as an alternative effectively has a reset tax bill, so choosing the one that benefits you the most from stock will benefit you.

4. Harvest loss

Life is full of ups and downs, and your investment is no exception. Sometimes their prices may be below what you paid them.

Harvest tax losses Use these moments to sell taxable assets that fit this moment and replace them with similar assets.

As a result, you can maintain your investment and then use these harvested losses to shift your taxes in the future now. This practice essentially sprinkles some of your taxable investments with taxable tax benefits. And our fully automated spin, tax collection+, takes a historically reserved tax strategy for the wealthy, and makes it available to the masses.

Happy harvest.

In conclusion, we care about taxes

Because it is one of the most reliable ways to boost your return. We can’t control the market, is it tax law? They are set up by the IRS and are extensive. And we can help you navigate them wisely. Otherwise we are not at work.

So, next peek at the returns, ask yourself how much of that growth will take tax time. If you are a better customer, you can rest assured that we are tirelessly trying to minimize those tax drugs.

You may not notice it right away, but of course. Live your life and make us suffer taxes.