Market MakeHer Podcast

5. Types of Brokerage Accounts and Tax Differences

Jun 27, 2023
Explore the fascinating world of brokerage accounts and taxes! Discover the differences between taxable and non-taxable accounts. Learn how capital gains and dividends impact your tax situation. Find out the unique features of IRAs and why they’re essential for smart investing. Hear tips on setting up accounts, adding beneficiaries, and navigating tax implications. Plus, get answers to listener questions about earnings tax. And don’t miss their fun take on surviving a zombie apocalypse!
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INSIGHT

Taxable Accounts Trigger Realized Taxes

  • Taxable accounts trigger taxes on realized gains, dividends, and interest as soon as you realize income.
  • Brokerages track cost basis and report covered securities to the IRS so everything is recorded.
ADVICE

Offset Gains With Strategic Losses

  • Use losses strategically to offset gains and reduce your tax bill in a given year.
  • Review net trades at year-end and consider harvesting losses to lower taxable gains.
INSIGHT

Retirement Accounts Shelter Trading Taxes

  • Retirement brokerage accounts shelter trades from immediate taxation, so frequent buying and selling won't trigger taxes.
  • That tax deferral comes with contribution limits to prevent abuse of the tax advantage.
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