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Be Proactive With Tax-Gains Harvesting

When it comes to investing and money, what you keep is more important than what you earn. Taxes play such an important role in our returns, income, and ability to meet our goals. Uncle Sam has to have his share. But we can limit the amount we send him every April. And in that, there are plenty of strategies to limit the amount of taxes we pay in our portfolios. But there’s one more that investors often overlook.

We’re talking about tax-gains harvesting.

No, that wasn’t a typo. While tax-loss harvesting has long been a technique for investors to reduce taxes, being proactive with our gains and harvesting those returns can be equally as tax efficient for investors. While tax-gains harvesting takes some planning to implement, it can help save investors plenty in taxes and reduce what they pay Uncle Sam every year.

Learn more about portfolio management on our Portfolio Management Channel.

Loss Versus Gains Harvesting

tax gains
Source: Charles Schwab

How to Tax-Gain Harvest

Some Caveats for Tax-Gains Harvesting

The Bottom Line