OT: Avoiding dividends in non-IRA accounts or what to do with them.

[NedFromYork]

I max out 401k, Roth IRA, HSA, and wife's traditional IRA, so don't think there are any other tax havens available to me. My problem is I just looked at our 1099 for our joint account that is not any of these, so taxable. Had $29k in ordinary dividends, which is going to kill me in taxes. I like RYTNX, does 2x S&P500 either way, but like any S&P 500 fund throws off dividends. I do not wish to give up the potential growth RYTNX offers for muni or other tax deductible bonds/funds, but what can I do? I have a $3k carry over loss from the year before, but had no options in 2017 for offsetting losses to the $29k because the market was up.

Thoughts on options? Appreciate it!

 

[sluggo72]

I max out 401k, Roth IRA, HSA, and wife's traditional IRA, so don't think there are any other tax havens available to me. My problem is I just looked at our 1099 for our joint account that is not any of these, so taxable. Had $29k in ordinary dividends, which is going to kill me in taxes. I like RYTNX, does 2x S&P500 either way, but like any S&P 500 fund throws off dividends. I do not wish to give up the potential growth RYTNX offers for muni or other tax deductible bonds/funds, but what can I do? I have a $3k carry over loss from the year before, but had no options in 2017 for offsetting losses to the $29k because the market was up.

Thoughts on options? Appreciate it!

if you want to stay in your RYTNX, then the only option is to pay the taxes and move on. do you reinvest the dividends? if so, have them spit out in cash long enough for you to pay the tax bill. Or move to Cayman, they dont have income taxes.

 

[LionDeNittany]

Why is earning $29k going to kill you in taxes?

You have $29k to offset your tax burden.

LdN

 

[katchthis]

I max out 401k, Roth IRA, HSA, and wife's traditional IRA, so don't think there are any other tax havens available to me. My problem is I just looked at our 1099 for our joint account that is not any of these, so taxable. Had $29k in ordinary dividends, which is going to kill me in taxes. I like RYTNX, does 2x S&P500 either way, but like any S&P 500 fund throws off dividends. I do not wish to give up the potential growth RYTNX offers for muni or other tax deductible bonds/funds, but what can I do? I have a $3k carry over loss from the year before, but had no options in 2017 for offsetting losses to the $29k because the market was up.

Thoughts on options? Appreciate it!

Ned as my accountant tells me, it's a problem many people would love to have.

 

[NedFromYork]

Thanks for the replies guys.

sluggo, yes, i reinvest the dividends.
LDN, yes, but I reinvest the dividends but I understand what you are saying.
katch, I agree and I do realize that and am grateful.

I don't mind paying the taxes, but this account is my "early retirement" account, i.e. the money to get me through age 56 until I can start drawing from my IRA/401k accounts. Want it to grow and only pay taxes when I start drawing. Any other options? Any 2x S&P 500 vehicles that don't throw off dividends?

I guess my only other option is an offsetting loss somewhere, which I don't have for 2017 in stocks/bonds. I am replacing a lot of visible rot on my home with maintenance free material, is that a property loss? It's about $10k.

 

[sluggo72]

Thanks for the replies guys.

sluggo, yes, i reinvest the dividends.
LDN, yes, but I reinvest the dividends but I understand what you are saying.
katch, I agree and I do realize that and am grateful.

I don't mind paying the taxes, but this account is my "early retirement" account, i.e. the money to get me through age 56 until I can start drawing from my IRA/401k accounts. Want it to grow and only pay taxes when I start drawing. Any other options? Any 2x S&P 500 vehicles that don't throw off dividends?

I guess my only other option is an offsetting loss somewhere, which I don't have for 2017 in stocks/bonds. I am replacing a lot of visible rot on my home with maintenance free material, is that a property loss? It's about $10k.

well if this is your 'early retirement' account, you could research and see if there is a variable annuity that has this or a similar fund. This way the dividends, growth etc are non taxable until you withdraw them. However when you withdraw the gains (and they are LIFO), they are taxed as ordinary income. You may have to use some sort of 72t election prior to 59 1/2 to get withdrawals with out tax penalties.

 

[sigchip_a_yahoo.com]

Dividends are taxed much lower than income, should only be 20% instead of 37%