Author Topic: Investing at end of year  (Read 2042 times)

Stephaniekb

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Investing at end of year
« on: November 14, 2014, 08:56:57 AM »
I have 100K to invest in taxable funds, likely will divide it between VTSAX and VGSLX (REIT fund). I know that the best day to fund an investment is always "today", but given how close we are to end-of-year dividend payments, should I wait until the end of the year since I'm still working and looking to minimize taxes?
Thanks!

mak1277

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Re: Investing at end of year
« Reply #1 on: November 14, 2014, 08:59:39 AM »
If the tax bill is going to be that big of an issue, why not have the initial round of dividends paid out to you instead of reinvested.  Then you can pay the extra tax out of the proceeds and still end up ahead.

waltworks

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Re: Investing at end of year
« Reply #2 on: November 14, 2014, 11:55:37 AM »
I always laugh when people ask this kind of question too. Avoiding taxes is one thing. Avoiding taxes by avoiding making any money? Not such a great idea. But hey, I can take care of your tax problem for you - come work for me for nothing.

OP: Just invest. Avoiding taxes on dividends means avoiding the dividends in the first place. Even if you are going to get taxed on them, better to have $1000 and get taxed on it than have zero, right?

-W

nereo

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Re: Investing at end of year
« Reply #3 on: November 14, 2014, 11:59:31 AM »
you already said it best when you said
Quote
"the best day to fund an investment is always "today"."

Stop over-thinking it.  What you are thinking about is called "buying a dividend' but it's already factored into the share price because everyone knows when and (almost) exactly how much the dividend will be.  Even on $100k the dividend won't be that large (~0.47%) and the tax on that dividend will be an even smaller fraction thereof.  The most you'll pay in extra taxes will be ~$70 (if its even that high) and (oh yeah) you'll be earning interest on that money now instead of in 2 months!

Stephaniekb

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Re: Investing at end of year
« Reply #4 on: November 14, 2014, 08:19:33 PM »
thanks for straightening ne out, everyone! Money going into investments on Monday!