Did you know that each investment vehicle is taxed differently?

You probably already know that the IRS sets different tax rates for different types of investments, such as:

  • Interest Income
  • Rental Income
  • Dividend Income
  • Stocks/Bonds
  • Capital Gains
  • Retirement Distributions
  • Annuities Distributions
  • Social Security Distributions

But what many people fail to understand is that investment firms often issue consolidated 1099 forms, covering every major tax category. However, your investments are different and need to be taxed differently.

So, how are you expected to know which tax category your investments fall under?

You could be paying a higher tax rate on all your investments without even knowing it, or even worse- paying tax on a tax-deferred investment. Investment tax is often classified as one of the following:

  • Short-term Capital Gains
  • Long-term Capital Gains
  • Gains in Retirement Accounts
  • Capital Losses

What if we told you that your investment could be taxed as a long-term capital gain at 15% compared to an ordinary income tax rate of 35%?

That’s a big difference, Right? You might even say “Sign me up!

Well, often investments can be filed under a different category, saving people money- year after year.

Even more- what if your investment income causes a change to your tax bracket?

Will you have a solid plan in place to make an informed decision on how to manage and oversee your investment and asset taxation?

Every single person and every single tax situation is unique. There is no “one size fits all” tax solution for the diversified portfolio. That’s why you need a strategic financial plan in place; one that works to minimize the investment tax you pay on each type of investment income you have.

Whether you’re planning for retirement or already retired, don’t risk another tax year without a blueprint to minimize your investment taxes. Register for a free workshop or one-on-one consultation today.

Each investment is unique and can be taxed differently to minimize the taxes you pay. This depends on many factors. Let us help.