Investing in stocks can be rewarding, but it also comes with tax obligations. Fortunately, there are several strategies to minimize your tax burden:
- Tax-Loss Harvesting: Offset capital gains by selling losing investments to reduce taxable income.
- Hold for Long-Term Gains: Investments held for over a year are taxed at lower capital gains rates compared to short-term holdings.
- Maximize Deductions: Deduct investment-related expenses such as advisory fees and interest on investment loans.
- Use Tax-Advantaged Accounts: Investing through IRAs and 401(k)s can help defer or eliminate taxes on gains.
Planning ahead with these strategies can help you keep more of your investment profits.
