Category: Taxes

Abstract A common misconception is that 401(k)s and IRAs save you from income tax.  They don’t, but they do save you from capital gains tax.  With compounding, the additional earnings from tax-advantaged accounts over taxable accounts can be large.

Abstract: Gains from sold investments, known as capital gains, are taxed lower than income.  Interest and dividends are taxed as income unless the government considers the dividends “qualified”.