Tax-Savvy Investing: 10 Ways to Minimize Your Tax Burden

4. Tax-Loss Harvesting

Tax-loss harvesting involves selling investments that are at a loss to offset gains in other investments. This strategy can be particularly useful in volatile markets where some of your holdings may be underperforming.

The key to effective tax-loss harvesting is to reinvest the proceeds from the sale into a different but similar investment. This allows you to maintain your desired asset allocation while reaping the benefits of a lower tax bill.