Stonegate Financial

Joe Kalmanovitz Published in Phoenix Business Journal’s November 2013 Ask the Experts

11213November 2013- Check out the Wealth Management section of the Phoenix Business Journal’s 2013 Ask The Financial Experts for educational and relevant topics.

“Q: How can I manage my portfolio to minimize the tax burden and achieve a higher after-tax return?

A: Most investors know that they should pay attention to asset allocation when structuring a portfolio, but many ignore asset location, ie which assets to place in taxable vs. tax-advantaged accounts, as well as determining which assets are appropriate for defined benefit pensions and certain types of trusts. Tax efficiency becomes more important the higher your marginal tax bracket. consider holding investments that produce ordinary income or short term gains(ie bonds or REITs) that are taxed at your highest marginal bracket in tax deferred (IRA, 401K) or tax free (Roth) accounts and save tax free municipal bonds, growth stocks and those that pay qualified dividends that are taxed at lower capital gains rates for taxable accounts. simple steps such as holing low turnover index funds instead of “actively managed” funds and harvesting losses to offset taxable gains can further reduce your tax burden. Every investor’s situation and estate planning goals are unique, so developing a strategy with the help of a qualified advisor is always recommended.

-Joe Kalmanovitz, CFP ®

Kalmanovitz, Joe, (2013 November 22). Ask the Experts. Phoenix Business Journal p. 17.