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Yes, Tax Knowledge Is Power

Understanding the intricacies of taxation can be a game-changer for your investments. Accardi Financial Group believes in the adage, “knowledge is power,” especially when it comes to your finances.

Unlocking the Power of Tax Knowledge Taxation, often viewed as complex, can become an asset with the right insights. Being aware of techniques that can legally minimize your tax liabilities can significantly enhance your financial growth.

Diverse Accounts, Diverse Tax Implications Assets, such as stocks, can be held across various accounts:

  • Brokerage Accounts
  • Traditional IRAs
  • Roth IRAs
  • 401(k)s

The tax implications when selling these assets can vary greatly based on the account they’re in.

Understanding Asset Taxation through a Hypothetical Scenario Consider an investment of $10,000 in stock that has grown to $50,000. The gain is $40,000, but the tax you pay hinges on the account:

  • 401(k): No immediate tax, but the total $50,000 becomes taxable at the standard income rate upon withdrawal.
  • Brokerage Account: Only the $40,000 gain is taxable, but at the favorable capital gains rate.
  • Roth IRA: If you’re 59½ or older, the total amount might be completely tax-free.

Is one method inherently better than the others? Not always. For instance, a married couple 65 or older could potentially withdraw $27,700 from their 401(k) tax-free this year.

The Asset Location Strategy: Your Key to Maximizing Returns Being strategic about where assets are placed can greatly reduce tax burdens. A study by Forbes even suggests that such strategies can boost a portfolio by up to 20% in the long run.

Taxes & Your Portfolio’s Performance Given the significant impact of taxes on investment growth, it’s crucial to prioritize tax management in financial planning. At Financial Accardi Group, our daily mission is to optimize this for our clients.

Seek Expertise at Accardi Financial Group Are you keen to assess your current tax efficiency? Curious if there’s more you can optimize? Reach out to us at Accardi Financial Group. We’re dedicated to empowering your financial journey.

Important Information

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. 

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

IRA withdrawals will be taxed at ordinary income rates. Withdrawals prior to age 59½ may also be subject to a 10% penalty tax. 

Roth IRA distributions of principal from a Roth IRA are tax-free; however, any earnings will be taxed at ordinary income rates and a 10% penalty tax will apply if withdrawn prior to age 59½ or within five years of the date the Roth IRA was established, whichever is longer. 

Examples cited are hypothetical, are for illustrative purposes only, are not guaranteed and subject to potential federal and state law amendments. There is no guarantee that you will achieve the results discussed or illustrated.  

This material was prepared by Lucia Capital Group.

Damon Accardi is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the respective names Lucia Capital Group and Accardi Financial Group which are separate entities from LPL Financial. LPL ART-536300 (02/24)