Investment decisions that impact your taxes

Описание: This is a video about Investment decisions that impact your taxes. With Mike Callahan of Sachetta.

Which investing decisions tend to affect taxes the most?
Often, the biggest differences come from what you own, where you hold it, and how decisions get implemented over time.

Why does “asset location” matter so much?

The same investment can be taxed very differently depending on which account holds it. A taxable account, a traditional retirement account, and a Roth-style account do not behave the same way after taxes. Coordinating where different holdings live can improve after-tax outcomes without changing your overall risk level. This is not about rigid rules. It is about alignment. Keep more of your wealth with smart investment placement.

How can mutual funds and ETFs create unexpected taxes?

Mutual funds and ETFs can pass through taxable income, and you’ll notice it most in taxable brokerage accounts. Two investments can look similar, but one may trade more or distribute gains or income more often, creating taxes even if you didn’t sell. Tax-smart investing matches the investment type to the account type, so taxes don’t show up by surprise.

How can rebalancing create taxes, even when it is a good idea?

Selling to rebalance in a taxable account can trigger capital gains. Rebalancing is healthy. The question is whether it can be done in a way that reduces avoidable tax costs, using cash flows or account selection when possible. The goal is not to “never realize gains.” The goal is to have a plan for when to realize gains.

Is direct indexing always worth it?

No. It can be helpful in the right situation, and unnecessary in others.
Direct indexing tends to be more relevant when taxable portfolios are larger, tax sensitivity is higher, and customization matters. For many people, broad, tax-aware ETF implementation is enough.

Are municipal bonds always better for high earners?

No. Munis can be useful when the after-tax math supports the role the money needs to play. They are one tool. The decision depends on context.



Where does coordination matter most in real life?
Coordination tends to matter most where life events, taxes, and investment decisions collide.

How can charitable giving be tax-smart without turning it into “a tax tactic”?

By giving in a way that fits your values first, then choosing the most tax-aware way to fund that giving. One practical example is the difference between donating cash and donating appreciated stock:

Giving cash is straightforward and may be the right answer in many situations.
Giving appreciated stock can sometimes allow you to support the same causes while also avoiding capital gains that would have been triggered by selling.
The point is not to make giving transactional. The point is to remove friction so generosity feels easier and more intentional.

Why do RSUs often create stress, and what helps?

RSUs are commonly taxed when they vest, and withholding may not match your true tax situation. That combination can lead to an unpleasant surprise for busy professionals with equity or partnership income, especially if RSUs are also creating a concentrated position. A coordinated approach connects timing, tax cash needs, and concentration risk. It replaces reactive selling with an intentional plan. (Read our guide: Unlocking the Value of your Stock Options for more on this topic.)

What is step-up in basis, and why should you be aware of it?

Step-up in basis is a tax rule that can reset an inherited asset’s “cost basis” (its tax starting value) to its fair market value at the owner’s death, which can reduce or even eliminate capital gains tax if the heir sells later. That matters because it can change whether selling a long-held investment (such as a family home) is helpful, or unnecessary. Tax-smart planning simply means you don’t make big “sell or hold” decisions in isolation, especially when family and legacy goals are part of the picture.

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