Keep What You Earn!
If you’re like most investors, you’ve done the hard part: You’ve saved money, taken on risk, and put your capital to work.
But here’s what most people don’t realize:
The IRS has perfectly legal strategies that allow you to pay little—or even nothing—on your investment gains.
In this short report, you’ll discover how wealthy investors, savvy retirees, and even middle-class families are quietly paying 0% tax on qualified gains… and how you can, too.
Strategy #1: Use the 0% Long-Term Capital Gains Bracket
The U.S. tax code rewards long-term investors. If you hold an asset for over a year, any profits you make qualify for the long-term capital gains rate.
Here’s where it gets interesting:
If your taxable income (after deductions) is below a certain threshold, your capital gains rate is 0%.
2024 0% Capital Gains Limits:
Filing Status | Income Limit |
Single | $44,625 |
Married Filing Jointly | $89,250 |
That means if you're retired or living off savings, and you sell appreciated stocks or ETFs, you could legally owe no federal tax on those gains.
Example:
A retired couple with $60,000 in combined Social Security and investment income could sell $20,000 of long-term stock gains tax-free—as long as they stay under the limit.
Strategy #2: Max Out Tax-Free Accounts (Roth IRA, Roth 401k)
Contributions to a Roth IRA or Roth 401(k) are made with after-tax dollars. But the big advantage is this:
Your investments grow tax-free… and withdrawals in retirement are also 100% tax-free.
That means:
- No capital gains tax
- No income tax
- No RMDs (Required Minimum Distributions)
Annual Contribution Limits (2024):
- Roth IRA: $6,500 ($7,500 if 50+)
- Roth 401(k): $23,000 ($30,500 if 50+)
Pro tip: If your employer offers a Roth 401(k), prioritize it—it has a much higher contribution limit than a Roth IRA.
Strategy #3: Tax-Gain Harvesting
This sounds counterintuitive, but stay with me:
If your income is under the 0% capital gains threshold, you can sell appreciated assets, pay 0% tax, and then re-buy them immediately.
This resets your cost basis—so if the asset continues to grow, you’ll owe less tax later (or none at all, if done again in a low-income year).
No 30-day “wash sale” rule applies to gains. You can buy back the same day.
Strategy #4: Invest Through a Health Savings Account (HSA)
The HSA is the only account that offers a triple tax benefit:
- Contributions are tax-deductible
- Investments grow tax-free
- Withdrawals for qualified medical expenses are also tax-free
If you have a High-Deductible Health Plan (HDHP), you can contribute:
- $4,150/year (individual)
- $8,300/year (family)
Use your HSA as a stealth retirement account by investing the funds (don’t spend it on day-to-day expenses), and letting the money grow tax-free over time.
Strategy #5: Hold Assets in the Right Accounts
Here’s a simple rule:
Put tax-inefficient investments in tax-advantaged accounts.
This strategy is called “Asset Location.”
What to keep in tax-free accounts (Roth IRA, HSA):
- High-growth stocks
- REITs
- Actively traded funds
What to keep in taxable accounts:
- Municipal bonds (often already tax-free)
- Broad market ETFs with low turnover
- Dividend stocks (qualified dividends are taxed at lower rates)
This simple realignment can save you thousands over time.
Bonus: Use a Donor-Advised Fund (DAF) for Charitable Giving
If you give to charity, consider donating appreciated stock via a Donor-Advised Fund.
You’ll:
- Avoid paying capital gains tax
- Get a full charitable deduction
- Still control how and when the money is donated
It’s a powerful way to lower your tax bill while doing good.
Conclusion: The IRS Code Favors the Informed
The tax code is full of traps—but it’s also full of loopholes for those who know where to look.
By using just a few of these strategies, you could save thousands each year, keep more of what you earn, and retire with far more wealth than investors who don’t optimize for taxes.
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