Tax-aware investing
Investment Decisions, Made With Taxes in View.
What you keep matters as much as what you earn. Investment decisions can create tax consequences, so we consider taxes alongside the investment decisions, not as an afterthought.
That can include where investments are held, when gains or losses are realized, Roth conversion opportunities, withdrawal sequencing, and the tax impact of portfolio changes.
Based in Naples, providing tax-aware investing and investment management to investors and retirees throughout Southwest Florida, with clients also served in New York and New Jersey. See our locations.
How Tax Awareness Shows Up in Investment Decisions
Taxes are one consideration in how we build and manage a portfolio. We look beyond what an investment may earn to consider where it is held, when gains or losses are realized, how retirement accounts interact, and how investment decisions may affect the rest of your financial picture.
Tax considerations inform the strategy, but they do not replace the investment rationale.
- Asset location across taxable, tax-deferred, and Roth accounts
- Realized gains and losses in taxable portfolios
- Tax-loss harvesting where appropriate
- Roth conversion opportunities
- Retirement withdrawal sequencing
Asset Location
Different accounts receive different tax treatment. Where appropriate, we consider whether particular investments are better suited to taxable, tax-deferred, or Roth accounts based on their expected tax characteristics, time horizon, liquidity needs, and role in the overall portfolio.
Asset location is considered alongside the investment strategy, not as a substitute for it.
Realized Gains, Losses, and Tax-Loss Harvesting
In taxable accounts, we consider holding periods, realized gains and losses, and, where appropriate, tax-loss harvesting as part of portfolio decisions. Realizing a loss may help offset realized gains, but the tax result is only one part of the decision.
If the investment rationale changes, risk increases, or we believe capital can be better deployed elsewhere, we may sell a position even when doing so creates a taxable gain.
Roth Conversion Opportunities
Converting part of a traditional IRA to a Roth IRA generally means recognizing taxable income today in exchange for the potential for qualified tax-free withdrawals later.
Whether a conversion makes sense depends on factors such as your current and expected future tax situation, time horizon, how the conversion tax would be paid, future required minimum distributions, and how additional taxable income may affect other parts of your financial life.
There is no universal Roth conversion rule. We can model potential scenarios as part of the planning process and coordinate with your CPA or tax professional before a tax-sensitive decision is implemented.
Retirement Withdrawal Sequencing
Which accounts you draw from and in what order can affect taxes over many years.
We consider taxable accounts, tax-deferred retirement accounts, Roth accounts, required minimum distributions, realized gains, and your other income sources together when evaluating how retirement spending may be funded.
A CPA Perspective, Coordinated With Your CPA
Ruth Grogan, CPA, brings a CPA’s analytical perspective to tax-sensitive investment and financial-planning decisions.
Juth Investment Advisory is a registered investment adviser, not a CPA firm, and does not prepare tax returns or provide individualized tax advice. Your CPA or tax professional remains responsible for tax advice and filings.
With your authorization, we coordinate relevant information with your CPA, attorney, and other professionals when appropriate so investment and planning decisions can be considered alongside the rest of your financial life.
Tax-Aware Investing Questions
Will you do my taxes?
No. Juth does not prepare or file tax returns or provide individualized tax advice. We consider the tax implications of investment and planning decisions and can coordinate relevant information with your CPA or tax professional.
Should I convert to a Roth IRA before retirement?
It depends. A Roth conversion may make sense in some circumstances and not in others. We consider your current and expected future tax situation, time horizon, source of funds to pay the conversion tax, retirement income, and other financial factors, then coordinate with your tax professional before implementation.
Do you use tax-loss harvesting?
When appropriate, we may realize losses in taxable accounts to offset realized gains when doing so also makes sense for the portfolio. Tax-loss harvesting is not automatic, does not guarantee tax savings, and can involve tax rules that should be considered with your tax professional.
Can taxes ever keep you from selling an investment?
Taxes are one factor in the decision, not the only factor. If an investment’s rationale has changed, its risk has increased, or we believe capital should be allocated differently, the investment reason to sell may outweigh the tax cost of doing so.
How much tax will this save?
We do not promise a specific amount of tax savings. Results depend on your circumstances, the investments involved, future tax law, market conditions, and decisions made over time.
Related: Tax considerations in financial planning · IRA & 401(k) rollover guidance · Investment management
