What "other" tax advantaged accounts should one know about?

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K8ya
Posts: 84
Joined: Fri Aug 10, 2012 12:48 am

What "other" tax advantaged accounts should one know about?

Post by K8ya » Fri May 17, 2019 2:23 am

Retirement accounts being the default that everyone recognizes. I know there are also college and health related accounts. I don't plan to have kids but intend to look into HSAs.

Are there any other tax advantaged accounts one should learn about?

PS: I live overseas as an American citizen

msk
Posts: 1384
Joined: Mon Aug 15, 2016 10:40 am

Re: What "other" tax advantaged accounts should one know about?

Post by msk » Fri May 17, 2019 4:49 am

Berkshire Hathaway pays no dividends, so all your tax headaches are postponed to the withdrawal phase during retirement; capital gains tax on what you sell. Since most BHs leave a good amount of NW when they die, you will never pay tax on any BRK.B shares by the time you die :mrgreen:

dbr
Posts: 30798
Joined: Sun Mar 04, 2007 9:50 am

Re: What "other" tax advantaged accounts should one know about?

Post by dbr » Fri May 17, 2019 7:55 am

I bond interest is tax deferred for thirty years.

DarkHelmetII
Posts: 422
Joined: Mon Jul 24, 2017 12:25 pm

Re: What "other" tax advantaged accounts should one know about?

Post by DarkHelmetII » Fri May 17, 2019 8:45 am

be weary of products such as variable annuities or VULs sold as a "holy grail" for tax efficiency. They have their (limited) time and place but in many cases one is simply better off putting money into a very low-cost, tax efficient, passively managed index fund such as VFIAX in a taxable brokerage account.

capjak
Posts: 80
Joined: Fri Sep 22, 2017 8:58 am

Re: What "other" tax advantaged accounts should one know about?

Post by capjak » Fri May 17, 2019 9:14 am

Multi Year Guaranteed Annuity is tax deferred (MYGA). They have durations as short as 3 years and pay similar to a CD.

They are considered CD alternative, sometimes with higher interest.
They have early surrender charges sometimes higher than a CD but also many allow for penalty free withdrawal of 10% of premium and/or all interest (assuming older than 59 1/2.
The highest interest usually paid by lowest rated insurance companies.

Not recommending but they can be an alternative for low interest account like CD.

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happymob
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Joined: Wed Nov 18, 2009 4:09 pm

Re: What "other" tax advantaged accounts should one know about?

Post by happymob » Fri May 17, 2019 10:07 pm

529a ("able") accounts if you have a special needs child.

crre
Posts: 40
Joined: Fri Apr 12, 2019 8:07 pm

Re: What "other" tax advantaged accounts should one know about?

Post by crre » Sat May 18, 2019 1:07 am

since you mention you live overseas, i guess i'd add that what is tax advantaged in the u.s. is not necessarily tax advantaged in the country where you live. in general you end up paying the higher of the two rates -- either because that country gets "first bite" or because the "second bite" takes the difference between the two rates.

and tax treaties are weird. the one relevant to me, for instance, specifies that my country of residence gets first bite of capital gains (even though i'm a u.s. citizen and the account is in the u.s.), whereas the u.s. gets first bite of dividends. maybe they all work that way, maybe not.

just one more complication to be aware of.

bberris
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Joined: Sun Feb 20, 2011 9:44 am

Re: What "other" tax advantaged accounts should one know about?

Post by bberris » Sat May 18, 2019 7:15 am

K8ya wrote:
Fri May 17, 2019 2:23 am
Retirement accounts being the default that everyone recognizes. I know there are also college and health related accounts. I don't plan to have kids but intend to look into HSAs.

Are there any other tax advantaged accounts one should learn about?

PS: I live overseas as an American citizen
Tax loss harvesting is a tax advantage/deferral. There is a 0 % bracket for capital gains and dividends and the tax rate is lower than earned income at higher income levels. They call it a taxable account.

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