Important Notice
These calculators are for educational and informational purposes only. Results are estimates based on the information you provide and should not be considered financial, tax, or investment advice. Your actual results may vary. For personalized guidance, please consult a qualified financial advisor, tax professional, or other appropriate expert.
People Also Ask
What is after-tax return?
After-tax return is your investment gain minus taxes owed on dividends, interest, and capital gains. A 7% return with 20% tax drag becomes roughly 5.6% after tax.
How do taxes affect investment returns?
Annual taxes on dividends and distributions reduce compounding. Over 30 years, a 1% annual tax drag can reduce final value by 20-30%. Tax-advantaged accounts avoid this drag.
What is asset location?
Asset location places investments in optimal account types: tax-inefficient assets (bonds, REITs) in tax-advantaged accounts; tax-efficient assets (index funds, growth stocks) in taxable accounts.
Are dividends taxed every year?
Yes. Dividends are taxable in the year received, even if reinvested. Qualified dividends get preferential rates (0-20%); ordinary dividends are taxed as income. This annual tax reduces compounding.