Investing: Tax Tips

TL;DR: Of your investments, put dividend yielding investments in tax-efficient vehicles, and stocks where you expect long-term capital gains in your other accounts.

When it comes to taxes on most investments, if you’re like most people, you’ll get taxed whenever you close a position, or whenever you get paid a dividend.

Unless the dividend is a qualified dividend, it’s likely going to be taxed just like short-term gains. And unless you are actively trading in and out of positions (which I don’t usually recommend), you’ll probably be holding stocks long-term and be getting favored tax treatment there in comparison.

So, of course, invest in what you believe you should invest in. But if you have any high dividend yielding stocks, I’d try and put them in tax-efficient investment vehicles such as a Roth IRA. You’ll end up saving more on taxes.

Happy investing!

TheJKW