4 Tax Tips Your Accountant Will Never Tell You
I have a high regard for accountants. They have an extremely difficult job. In order to maximize tax savings for their clients, they need to understand and interpret an incredibly complicated Internal Revenue Code. Former U.S. congressman John Hostettler once said, “The Internal Revenue Code and regulations add up to 1 million words and is nearly seven times the length of the Bible.”
It’s not surprising that few accountants look outside the code for tax-saving opportunities. That’s unfortunate. There’s a world of tax-saving possibilities related to investing. If your accountant is not familiar with them, your registered investment advisor should be alerting you to them.
The failure to focus on the tax efficiency of your investments can significantly affect your returns. According to a 2008 Vanguard publication, “Tax-Efficient Equity Investing: Solutions for Maximizing After-Tax Returns,” taxes have the potential to take the “biggest bite” out of total returns. How much of a bite? According to research by Joe Dickson and John Shoven, “Taxes and Mutual Funds: An Investor Perspective,” taxes can reduce the returns of a mutual fund by as much as a whopping 25 percent.
These tax tips will help make you a more tax-savvy investor:
Read the rest of the article at US News.