Tax efficiency is essential to maximizing returns. Due to the complexities of both investing and U.S. tax laws, many investors don't understand how to manage their portfolio to minimize their tax burden.
Simply put, tax efficiency is a measure of how much of an investment's return is left over after taxes are paid. The more that an investment relies on investment income – rather than a change in its price – to generate a return, the less tax-efficient it is to the investor. This article will detail common strategies for creating a more tax-efficient portfolio. It will discuss tools commonly overlooked by investors that result in lower lifetime returns due to paying higher taxes.
Find out how to manage your portfolio to minimize your tax burden.