Making smart decisions about your investments can save you from heavy taxes in the future. Profits from your investments in 2024 could lead to considerable taxes when you file the following spring, but adopting sensible strategies now could help reduce these costs.
Here’s an example; by reassessing the structure of your investment portfolio now, you can maximize its tax efficiency. Jared Woodard, an investment and ETF strategist, recommends this practice. Another tactic is to consider swapping existing mutual funds for exchange-traded funds, which can limit hefty capital gains at year-end.
Also, by reconsidering your asset allocation and location, you can make smarter decisions. For instance, holding fixed income assets like Treasurys and money market funds that generate taxed interest in tax-deferred accounts may be more profitable. Meticulous planning and investment moves can lead to significant savings in tax costs.
1. Smart decisions: Making choices based on careful thought, consideration, and knowledge.
2. Profits: The money you gain or earn from an investment or a business after subtracting costs.
3. Tactic: A plan or method designed to achieve a particular goal, especially in business or investing.
4. reconsidering: To think carefully about a decision or idea once again to determine if it is still the best choice.
5. Meticulous: Showing very careful and precise attention to details.
Vocabulary List:
- Smart decisions (noun): Making choices based on careful thoughtconsiderationand knowledge.
- Profits (noun): The money you gain or earn from an investment or a business after subtracting costs.
- Tactic (noun): A plan or method designed to achieve a particular goalespecially in business or investing.
- Reconsidering (verb): To think carefully about a decision or idea once again to determine if it is still the best choice.
- Meticulous (adjective): Showing very careful and precise attention to details.
- Efficiency (noun): The ability to accomplish a job with a minimum expenditure of timemoneyenergyor effort.
