DIY investing has become the most popular way to take control of retirement plans and personally manage all levels of financial goals. There is substantial information available to develop sound investment strategies, but difficulties can begin to stack up if you do not have a clear understanding to manage the necessary taxes. Knowing how to handle investment tax topics is the only real way to improve the profits you make. E*TRADE offers a variety of easy-to-use tools and resources that are designed to help traders and investors alike.
E*TRADE conducted a recent StreetWise survey of experienced investors. It revealed that while many are tax conscious, most aren’t using all of the tools offered to them to reduce the amount of taxes they pay each year on investments. Tax season is in full swing and tax day is just around the corner. E*TRADE is exploring investor behavior when it comes to taxes in order to offer ways/tools to help manage taxes now and in the future. Discovering additional ways to save money on taxes puts more money from investments right in your pocket.
Customers of E*TRADE can enjoy a wide range of resources and tools with the E*TRADE Tax Center. These resources are available in one convenient place and cover relevant information from cost basis reporting, suggestions on managing capital gains and losses to frequently asked tax questions.
Valuable educational resources are also available to all investors through the E*TRADE Education Center, regardless of whether you are a current customer or not. You do not even have to log in to access information.
The E*TRADE StreetWise survey also revealed that investors are familiar with the benefits of tax-advantaged accounts, such as IRAs, 401(k)s, 403(b)s and Health Savings Accounts (HSAs). A firm 45 percent of all investors believe investing in these accounts is the most effective strategy for limiting taxes they pay each year. Additionally, nearly half of all trading takes place in tax-advantaged accounts, such as IRAs. That number is higher for younger investors, with nearly 60 percent of all their trading activity happening through IRAs.
Below is a list of tax savings strategies that seasoned investors found most useful as revealed by the survey (from most to least popular):
- Investing in tax-advantaged accounts, such as 401(k)s, 403(b)s, IRAs, health savings accounts (HSAs) – 45%
- Selling positions that have lost value in order to offset capital gains – 18%
- Holding investments for at least one year to ensure lower taxes on gains – 17%
- Investing in tax-free municipal bonds – 10%
- Investing in tax-advantaged deferred annuities – 6%
- Investing in funds with low turnover – 4%
The E*TRADE Education Center also offers articles on subjects like charitable giving. Make sure that you are receiving the maximum benefits for all of the resources you donate each year. Proper deductions for donations will keep you from experiencing pains from under or overpaying annual tax amounts. Learn the best ways to help your favorite charities that offer real advantages to your overall tax savings strategies.
Business entrepreneurial activity is at an all-time high. More people are self-employed today than at any other time in recorded history. Taxes for the self-employed can be tricky. There are added penalties in some situations, and it helps to be aware of those possibilities. Stay on top with the best information available to reduce taxes and maximize profits with the E*TRADE Education Center. Doing the extra research on the best and most beneficial tax strategies to succeed now will pay off in the future.
There are specific investments individuals make too, such as stocks and bonds that require specialized management skills to avoid paying unnecessary tax. Spending time reading through the resources available at the E*TRADE Education Center can give you the guidance you need to feel more secure about your investment decisions and save every dollar possible at tax time this year.