To Reduce Your US Tax Bill, Keep Dividends Qualified

Paul Robertson and Tuppence Russo

The recently passed American Tax Relief Act (ATRA) raised the top tax rate for qualified dividends, but it scarcely affected the benefit this rate provides to investors. That’s because ATRA also raised the top tax rate on ordinary income—the rate investors have to pay for nonqualified dividends—by nearly as much. (more…)


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New US Tax Law May Reduce Portfolio Trading

Daniel B. Eagan, Paul Robertson and Tara Thompson-Popernik

By raising capital-gains tax rates for some investors, the American Tax Relief Act alters the ground rules for tax-aware trading. If your taxable income exceeds $400,000 (single filer) or $450,000 (joint filer), there may now be less trading in your portfolio because each trade must clear a higher hurdle. (more…)


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Municipals Escape Taxation for Now

In the end, the American Taxpayer Relief Act did not eliminate the tax exemption for municipal bonds or modify it any way. In fact, the increase in the top marginal tax rate makes muni bonds more attractive versus taxable bonds. And the Medicare surtax on investment income, enacted in 2010 but effective in 2013, makes muni bonds more attractive still. (more…)


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