Equifax

Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter

 

Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

Tax Tips That Can Save You Real Money

Written by Dan Solin on November 23, 2010 in Retirement  |   No comments

Tax Tips That Can Save You Real Money Most investors have their eye on the wrong ball. They try to time the market, pick stocks, and pick “hot” fund managers. There is no data indicating anyone can engage in these activities successfully over an extended…

Tax Tips That Can Save You Real Money

Most investors have their eye on the wrong ball. They try to time the market, pick stocks, and pick “hot” fund managers. There is no data indicating anyone can engage in these activities successfully over an extended period of time. Much-touted winning streaks of the investment guru du jour are a consequence of luck and not skill.

A far more productive use of your time would be to understand how you can minimize the taxes you pay on the returns earned from your investments.

I gathered some of these tax tips from Allan Roth’s excellent book, How a Second Grader Beats Wall Street:

1. Pay a lower tax rate on gains. This seems like a no-brainer. Higher federal ordinary income tax rates range from 10 percent to 35 percent, depending on the amount of taxable income. The highest federal capital gains rate is currently 15 percent, but it is scheduled to increase to 20 percent on January 1, 2011. To qualify for capital gains tax treatment, you must hold your investment for a minimum of 366 days.

It gets better for investors in the 10 percent and 15 percent ordinary income tax brackets. They pay no capital gains on investments that qualify.

Most stock dividends are also taxed at the lower capital gains rate.

When deciding between selling an investment prior to holding it for a year and a day or hanging on to it, you need to be aware of this difference in the taxes you will incur.

2. Buy index funds. Many investors do not understand that mutual funds generate reportable tax income to shareholders even if they do not sell their shares. Taxes are generated by portfolio turnover. Turnover generates capital gains, dividends, and interest, all of which result in taxes (both ordinary income and capital gains) that fund investors must pay.

Actively managed funds (where the fund manager attempts to beat a designated benchmark) have significantly higher turnover rates than those of index funds, generating more taxable income. Vanguard founder John Bogle did a study of the amount that investors got to keep, net of taxes and other costs, over a sixteen-year period. Investors in actively managed funds retained only 47 percent of their cumulative returns. Investors in index funds kept 87 percent of their returns.

When you compare the after-tax returns of index and actively managed funds, index funds outperform more than 90 percent of actively managed funds over the long term.

The lesson is simple: Buy index funds.

3. Consider tax-deferred investments. Traditional IRAs and 401(k) plans give you the opportunity to defer taxes. This is the equivalent of a loan at zero percent interest. These investments also have meaningful immediate tax benefits by reducing your taxable income.

There are some risks. It’s possible you could be in a higher tax bracket when you withdraw funds from these accounts. In addition, most 401(k) plans have high costs and poor investment choices. Nevertheless, the combination of a reduced tax bite, deferred taxes, and a possible employer match on your plan makes them worthy of serious consideration.

4. Harvest your losses. “Tax loss harvesting” permits you to sell funds in your taxable accounts that have losses, simultaneously purchase a different fund with the same benchmark, and repurchase the original funds thirty-one days or more from the sale of the original funds.

“Harvesting” these losses has significant tax advantages. You can apply $3,000 of your net capital losses to offset your income. The balance of your capital losses can be carried over and offset against short- or long-term capital losses (depending on the type of capital loss you incurred) in the future, until it is used up.

Tax loss harvesting is not uncomplicated. You will need a competent financial adviser and tax professional to help you do it correctly.

With a basic knowledge of the impact of taxes, you can significantly increase your retirement nest egg.

Dan Solin is a Senior Vice-President of Index Funds Advisors. He is the author of the New York Times best sellers The Smartest Investment Book You’ll Ever Read and The Smartest 401(k) Book You’ll Ever Read. His latest book is The Smartest Retirement Book You’ll Ever Read.

Follow Dan Solin on Twitter.

Read More:

Strategies for Outsmarting Uncle Sam at Tax Time
Participating in Your Company’s 401(k) Plan Is Not a No-Brainer
All Money Market Funds Are Not Created Equal
Maximize Your 401(k) Returns

Enrolled Agent Eva Rosenberg shares more tax tips on the Equifax Personal Finance Blog.

No comments yet


Leave a Comment


Name :


Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.


Retirement Archive