3 Smart Ways for Investors to Cut Their Taxes
High returns aren't the only factor to consider when choosing your investments. A tax-efficient portfolio can save enough on your tax bill to nicely compliment your investment returns. Take a look at your own portfolio to see if you've implemented the following tax-shrinking tips.
Investors have plenty of options for tucking away their money. If you do your investing in accounts with built-in tax advantages, such as HSAs, IRAs, and 401(k)s, you can save a bundle on your tax bill. Investments in these accounts don't generate taxes when you receive dividends from stocks or interest from bonds, and they also won't incur capital gains taxes if you sell an investment for a profit.
In addition, IRAs and 401(k)s give you a tax break either on the money you put into the account or the money you take out (depending on whether the account is a traditional tax-deferred account or a Roth account). HSAs actually give you a tax break on both contributions and distributions, making them the only triple tax-advantaged account.
Source: Fool.com
