Tax-Aware Investing: Keep More of Your Gains Without Greater Risk
Investors are often concerned about minimizing transaction costs that can eat into their gains, without realizing that taxes can take an even bigger bite out of returns. Tax-aware investment management offers some protection. This is an active investment approach that aims to maximize after-tax
Active Trading Can Mean a Heftier Tax Bill
There are endless ways to invest, with vehicles and opportunities to suit different needs, time horizons, and risk tolerances. As you explore the various options available, it’s wise to consider the tax consequences of your investments. Frequent, active trading with a goal of chasing
Is it Better to Take a Lump Sum or Lifetime Payments from Your Pension?
If you are fortunate enough to be eligible to receive a pension from your employer when you retire, one of the main decisions you will face is whether to accept a lump-sum distribution or lifetime monthly payments. As you approach your retirement date, it’s
How Do UTMA Accounts Work from a Tax Perspective?
For parents seeking tax-advantaged strategies for transferring funds to their minor children—whether as a way to save for college or simply to give their kids a financial head start when they become adults—a popular type of custodial account called a UTMA account may provide
What is the Difference Between Trading and Investing?
For anyone who participates in buying and selling stocks, making a profit is the ultimate goal. However, two main types of stock market participants—traders and investors—follow different strategies in pursuit of that goal. The most significant difference comes down to timing: investors seek to
Why an ETF is Better Than a Mutual Fund
Investors looking for an easy way to buy a diversified portfolio used to opt for mutual funds. Today, exchange-traded funds (ETFs) are an increasingly popular option offering several benefits. Both vehicles invest shareholders’ combined money in a broad set of assets, which provides the
What is an Employee Stock Ownership Plan (ESOP) and How Does It Work?
From stock options to profit-sharing plans, there are many ways to provide employees with an ownership interest in a company. However, the most common method is a type of tax-favored employee benefit plan known as an ESOP, or employee stock ownership plan. Currently, over
The Ins and Outs of Medicare Enrollment
It’s easy to focus your retirement planning on your finances and give little thought to healthcare. Medicare, the federal health insurance program for older and disabled Americans, is waiting in the wings to provide at least basic coverage. But Medicare is complex, and enrollment
Updating the Biden and Trump Tax Plans
Now that the presidential election is just days away, what do we know about the leading candidates’ current tax plans? The top line takeaway is that former Vice President Joe Biden has pledged not to raise taxes on anyone earning less than $400,000, while
Social Security Benefits: Should You Take Them Early, or Wait as Long as Possible?
When you reach age 62, you are eligible to begin taking the Social Security benefits that you have paid into throughout your working life. While this is an exciting milestone and you may be eager to start receiving your share, you will be entitled
Real Estate Investments Yield Low-Tax Income
It’s a sad fact of the tax code that the more money you make, the more you owe to the tax man. That’s especially true if you’re self-employed and paying the entire 15.3% Federal Insurance Contributions Act (FICA) tax for Social Security and Medicare
Required Minimum Distributions (RMDs) are Waived in 2020—Should You Still Take Them?
If you are age 72 or older, you generally must take required minimum distributions (RMDs) from your traditional IRA or employer-sponsored retirement plan, such as a 401(k) or 403(b), each year. These amounts are included in your taxable income, and if you fail to