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13 Tax Reducing Ideas

November 19th, 2006 by digerati

Here are thirteen ideas to reduce the tax you pay on investments.

1. Use tax advantaged accounts (IRA, 401(k), 403(b), etc)
2. Use taxable accounts for short term goals
3. Use index or tax managed funds in taxable accounts
4. Keep turnover low
5. Use only tax efficient funds in taxable accounts
6. Avoid short-term gains
7. Buy fund shares after the distribution date
8. Sell fund shares before the distribution date
9. Sell profitable shares after the new year
10. Harvest tax losses
11. Place funds for maximum after tax return
12. Consider municipal bond funds and US Savings Bonds
13. Except for short-term goals, select taxable funds that will be held long-term.

Source: The Bogleheads Guide to Investing

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