Diversifying your tax policy may be more timely than ever before, now that we have so many changes happening in Washington DC. So says Dave Stevens, CFP, CPA, PFS, with A&I Financial Services LLC. In last week’s tax chat event, Dave discussed many ways to save a few dollars in taxes. We entered a respectful and friendly debate about whether a person should go Tax Free, or just diversify their tax policy.
There are three basic ways our investments are taxed: taxed-as-earned, tax-deferred, and tax-free. The taxed-as-earned CDs, brokerage accounts, and other investments are (hopefully) held for a long time and taxed at the (almost always lower) long-term capital gains tax rates.