Skip to main content

Are you an investor? Whether you are a full-time investor or you use your investments to make some side money or to prepare for retirement, there are many ways to save money when it comes to taxes. While the following tips may not seem like they will save you a lot on taxes at first, they do add up, especially if you are in it for the long run.

Tax-Advantaged Investments

There are many investments that may not pay as large a return as your existing investments, but their tax advantages might just offset their lower returns. For example, if you invest in municipal bonds, the interest that you earn will not usually be subject to federal taxes. Not only that, but many of them will be free from local and state taxes as well. US savings bonds will usually be exempt from state taxes.

Offset Your Gains

Every investor will lose money at some point. The good news is that you can use your losses to offset your gains. Not only that, but you can use your losses to offset your non-investment losses so that they can be deducted from your taxes, up to $3,000. As you may have expected, there are exceptions to this rule. You can only use short-term losses to offset short-term gains and long-term losses for long-term gains. You also can not take advantage of this law if you buy the stock back within thirty days of selling it. A professional accountant will help you maximize your losses.

Hold More Than a Year

Long-term gains have advantages over short-term gains in terms of how much taxes you have to pay. Consider holding on to investments and stocks for at least a year and a day so that they qualify as long-term investments. This is often easier to do if you have a long-term investment strategy anyways.

For more tax advice, contact us today.