Tax-managed investing 101
New to the active tax management concept? Explore this page for the highlights.
What is active tax managed investing?
Active tax-managed investing is an investment approach aimed at minimizing tax drag and maximizing after-tax wealth.
This dynamic approach uses real-time, year-round techniques such as tax loss harvesting, minimizing wash sales, and tax-smart yield management to systematically target sources that may erode investment returns, while helping investors keep more of what they earn.
How does tax management help me?
In a world where investors are fixated on a pre-tax investment perspective, after-tax investment value tends to be an afterthought.
Yet, the compounding tax drag nevertheless continues to weigh down portfolios and reduce returns. Fortunately, this perpetual problem has a systematic solution in the form of active tax management. Designed to target actual problems faced by investors, this dynamic approach carries out real-time, year-round measures aimed squarely at minimizing avoidable losses and maximizing after-tax wealth.
Where can I learn more about tax-managed investing?
Tax management blog posts from Russell Investments' experts
What is tax drag?
How does tax drag impact an investor’s portfolio?
How can advisors help clients mitigate tax drag?
What is tax-loss harvesting?
How does capital loss carry forward work in mutual funds and ETFs?
How can active tax-loss harvesting help minimize tax liabilities?
Does tax-loss harvesting only benefit high-income investors?
When is the ideal timing for tax-loss harvesting, and why?
What is a wash sale, and why should it be avoided?
What are common obstacles that prevent investors from utilizing tax-loss harvesting effectively?
What tool can advisors use to help clients understand the tax implications of dividend distributions on their total wealth return?
What is the significance of the Form 1099-DIV for investors?
Why is it important to understand the different tax rates that affect investment returns?
How can reviewing a client’s Form 1040 provide insight into their investment-related income?
What are some key items to look for on Form 1040 when reviewing a client’s tax return?
Why should financial advisors ask to see a client’s Form 1040, despite potential reservations?
What are three ways taxes can be triggered for mutual funds held in non-qualified investment accounts?
What is the benefit of investing in tax-managed mutual funds?
What is tax-managed v. tax advantage?
Is it worth investing in tax-managed mutual funds?
How to invest in a tax-managed fund?
What are the pros and cons of tax-managed investing?
The cons: Tax-managed investing cannot guarantee tax-free returns or better performance compared with traditional funds, and may have higher expenses and/or advisor fees.