Year-End Tax-Saving Strategies
With the 2013 tax year winding down, readers swap tactics for lessening the tax pain.
With the stock market up nearly 30% so far in 2013 and up 18% on an annualized basis during the past five years, it would be hard to blame investors for feeling some trepidation about the upcoming tax-filing season. Funds could distribute taxable capital gains between now and year-end, and offsetting tax-loss candidates tend to be few and far between in most portfolios. Moreover, the 2013 tax year brings with it a new income tax bracket that's higher than all others, a 20% capital gains rate, and a new Medicare surtax for the highest-income earners.
Against that backdrop, several Morningstar.com readers said they were getting busy to keep their tax bills down--not just for 2013 but in future years, as well. In response to my query about year-end tax strategies, which I posted in the Portfolio Design/Management section of Morningstar.com's Discuss forums, readers said they were honing their taxable portfolios for greater tax efficiency, converting traditional IRAs to Roth, and strategizing about deductions in an effort to stay in the lowest possible tax bracket. To read about some of the most popular tax-management strategies or share your own plan, click here.
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.