Taxes can take a bite out of your investment returns if you’re not careful. Understanding how different investments are taxed can help you plan smarter.
3 Common Ways Investments Are Taxed:
- Capital Gains
- Sell an asset for more than you paid? That’s a capital gain.
- Short-term (under 1 year) = taxed as income
- Long-term (over 1 year) = taxed at lower rates
- Dividends
- Qualified dividends are taxed at capital gains rates
- Ordinary dividends are taxed at income tax rates
- Interest
- From bonds, CDs, or savings accounts—taxed as income
Your Account Type Also Matters:
- Tax-deferred (Traditional IRA/401(k)) — taxed when withdrawn
- Taxable brokerage — taxed annually on earnings
- Tax-free (Roth IRA) — qualified withdrawals are tax-free
Tax-smart investing doesn’t have to be complicated, but it does require planning.
*Please note: We are not CPA’s and cannot offer tax advice. Please contact your CPA for detailed tax information
**For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful
