Taxable Accounts: How to Use Them to Boost After-Tax Returns

When you think about investing, you probably think of taxable accounts, investment accounts where you pay taxes on interest, dividends, and capital gains each year. Also known as brokerage accounts, they’re not tax-deferred like IRAs or 401(k)s—but that doesn’t mean they’re second-rate. In fact, using them wisely can save you thousands in taxes over time. Most people treat taxable accounts like afterthoughts, dumping leftover cash into them after maxing out retirement accounts. But that’s like putting premium fuel in a lawn mower and regular gas in your car. The taxable account is your tool for smart asset placement—not a dumping ground.

Here’s the real secret: not all investments are created equal when it comes to taxes. Capital gains tax, the tax you pay when you sell an investment for more than you paid only hits you when you sell, and long-term gains (held over a year) are taxed at much lower rates than ordinary income. That’s why stocks and ETFs that don’t pay big dividends are perfect for taxable accounts. Meanwhile, bond funds, which generate yearly interest income taxed at your full rate, belong in tax-advantaged accounts like IRAs. This is called asset location, the strategy of placing different types of investments in the most tax-efficient accounts. If you’ve got a taxable account, you’re already halfway to a smarter portfolio—you just need to know what to put in it.

And it’s not just about what you buy. How you manage it matters too. Rebalancing with dividends instead of selling shares cuts taxes and fees. Using tax-loss harvesting to offset gains can turn a losing position into a tax win. Even something as simple as holding a fund for 13 months instead of 11 can drop your tax bill by half. The posts below show you exactly how real investors are using taxable accounts to outsmart the system—not by chasing hot stocks, but by making small, smart moves that add up over time. You’ll see how to pick the right funds, when to ignore your broker’s recommendations, and how to turn your brokerage account into a silent tax-saver. No fluff. No jargon. Just what works.