Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company (SEI). Services provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Some information contained herein has been provided to SEI by an unaffiliated third party. SEI cannot guarantee the accuracy or completeness of the information and assumes no responsibility or liability for its incompleteness or inaccuracy.
Tax and Tax Management Techniques Disclosures – SIMC does not represent in any manner that the tax consequences described as part of its tax-management techniques and strategies will be achieved or that any of SIMC's tax-management techniques, or any of its products and/or services, will result in any particular tax consequence. The tax consequences of the tax-management techniques, including those intended to harvest tax losses, and other strategies that SIMC may pursue are complex and uncertain and may be challenged by the IRS. Neither SIMC nor its affiliates provide tax advice.
Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax, penalties and/or interest which may be imposed by the IRS or any other taxing authority; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor. Accordingly, Clients should confer with their personal tax advisors regarding the tax consequences of investing with SIMC and engaging in the tax-management techniques described herein (including the described tax loss harvesting strategies) based on their particular circumstances. Clients and their personal tax advisors are responsible for how the transactions conducted in an account are reported to the IRS or any other taxing authority on the Client’s personal tax returns. SIMC assumes no responsibility for the tax consequences to any Client of any transaction.
Investing involves risk including possible loss of principal.
Index returns are for illustrative purposes only. Index returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
For those portfolios of individually managed securities, SEI Investments Management Corporation (SIMC) makes recommendations as to which manager will manage each asset class. SIMC may recommend the termination or replacement of a money manager and the investor has the option to move the account assets to another custodian or to change the manager as recommended. Please see SIMC’s Form ADV Part 2A (or the appropriate wrap brochure) for a full disclosure of the fee schedule.
Neither SEI nor its subsidiaries are affiliated with your advisor.
To determine if the Funds are an appropriate investment for you, carefully consider the investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ full and summary prospectuses, which can be obtained by calling 800-DIAL-SEI. Read them carefully before investing.
SIMC is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co. (SIDCo.) SIMC and SIDCo are wholly owned subsidiaries of SEI.
Independent Advisor Solutions by SEI
Building better financial futures, together.
Taxes are complicated, but your financial advisor is your best resource to help you understand and implement the tax strategies that are right for you. Staying tax smart may help you manage the impact of taxes on your investments.
At SEI, tax management is part of what we do every day – not just ahead of tax time. We take a proactive and holistic approach to managing investment portfolios, implementing a range of tax-smart strategies for advisors to use with their clients – all part of our effort to build a better financial future, together.
Every day is a good day to talk with
your financial advisor about taxes.
7 ways to become a tax-smart investor
To help you keep more of what’s yours, your financial advisor can show you multiple tax-smart strategies that can help reduce the impact of taxes on your investment portfolio. Click any of the icons below to learn about different tax-smart techniques, and then work with your advisor to explore putting them in place.
If you answered NO to any of these questions, keep reading and then work with your financial advisor to learn which tax strategies make the most sense for you.
Are you a tax-smart investor?
Take the quiz to find out.
Did you know that taxes are one of the biggest detractors of your overall investment performance? The good news is, they can also be one of the easiest to control.
The impact of ignoring tax management
Are you a
tax-smart investor?
7 ways to keep more of what’s yours
As investors, we’re focused on returns and measuring progress by the growth of our investments. But growth is only half the story – it’s even more important to try to keep the money you earn.
DOWNLOAD THIS BROCHURE
Tax-loss harvesting can mean that not all investment losses are a bad thing. It can help you to reduce your overall tax liability by offsetting your gains with losses. First, you and your financial advisor sell assets that are currently valued at a lower price than you paid for them - creating a loss. You can then use the loss from the sale to offset capital gains you might have generated elsewhere in your portfolio. The result can be a lower overall tax bill.
Tax-Loss Harvesting
Tax-Smart Strategies
Overall Tax Burden
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
+ Important Information
Did you know that your taxes can be significantly impacted by the amount of time you hold onto an investment before you sell it?
NO
YES
Taxes Reduce Performance Over Time
Hypothetical Loss on $100,000 After 42 Years
After-Tax Portfolio
Portfolio before taxes
$7,775,358
62% lost to taxes
$4,817,637
Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company (SEI). Services provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.
To determine if the Funds are an appropriate investment for you, carefully consider the investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ full and summary prospectuses, which can be obtained by calling 800-DIAL-SEI. Read them carefully before investing.
Neither SEI nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.
For those portfolios of individually managed securities, SEI Investments Management Corporation (SIMC) makes recommendations as to which manager will manage each asset class. SIMC may recommend the termination or replacement of a money manager and the investor has the option to move the account assets to another custodian or to change the manager as recommended. Please see SIMC’s Form ADV Part 2A (or the appropriate wrap brochure) for a full disclosure of the fee schedule.
SIMC is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co. (SIDCo.) SIMC and SIDCo are wholly owned subsidiaries of SEI Investments Company.
Neither SEI nor its subsidiaries are affiliated with your advisor.
1.
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
Do you know what your after-tax return is?
2.
YES
NO
Taxes impact every investor,
regardless of income level.
Taxes impact every investor,
regardless of income level.
Are you actively planning your level of charitable donations with your advisor to minimize your taxes?
3.
YES
NO
Working with your advisor, you can find lots of ways that charitable contributions can be utilized to mitigate tax liabilities through reducing taxable income or deferring capital gains.
Working with your advisor, you can find lots of ways that charitable contributions can be utilized to mitigate tax liabilities through reducing taxable income or deferring capital gains.
Do you know the current impact taxes are having on your overall investment portfolio?
4.
YES
NO
Make tax management a part of your regular conversations with your financial advisor. Your advisor can calculate your after-tax return and help you explore other strategies to keep more of what you have earned.
Make tax management a part of your regular conversations with your financial advisor. Your advisor can calculate your after-tax return and help you explore other strategies to keep more of what you have earned.
TAX-LOSS HARVESTING
TAX-LOT COORDINATION
HOLDING PERIOD MANAGEMENT
EFFICIENT GIFTING STRATEGIES
TAX-MANAGED PORTFOLIO DESIGN
TAX-SMART WITHDRAWALS AND REBALANCING
PORTFOLIO TRANSITION MANAGEMENT
Holding Period Management
Capital gains realization strategies can help spread investment gains out over time to ease the tax impact. Capital gains are realized when you sell an asset for more than you purchased it for. That profit you’ve earned will be taxed differently, depending on how long you held that asset before you sold it.
Tax-Managed Portfolio Design
Tax-managed portfolio design uses tax-free municipal bonds and emphasizes tax-favored investments in taxable accounts in an effort to optimize after-tax returns.
Tax Lot Coordination
Tax lot coordination begins with each tax lot, which is a record of each transaction and its tax implications within your portfolio. Tax lot accounting is a technique that tracks every tax lot in your portfolio and strategically identifies which tax lots to sell based on the holding period and gain or loss.
Tax-Smart Withdrawals and Rebalancing
Tax-smart withdrawals and rebalancing means optimizing trades to sell assets whenever they need to be sold—whether it’s to generate income or to rebalance your asset mix. Optimizing could mean reducing the number of trades to avoid excessive tax liability or selling assets with lower levels of gains.
Efficient Gifting Strategies
Gifting strategies can be implemented a number of ways and can be useful to help reduce tax liabilities in a single year and over time. Your financial advisor can assist you with creating a charitable gifting plan and/or to establish and give in a tax-efficient way to a donor-advised fund.
Portfolio Transition Management
Portfolio transition management happens when you are able to transfer assets from one investment portfolio to another, as opposed to selling them from one portfolio and buying them in the other portfolio. Keeping a portion of the investments intact creates a foundation to build on and helps avoid triggering a tax liability.
TAX-LOSS HARVESTING
TAX-MANAGED PORTFOLIO DESIGN
TAX-LOT COORDINATION
TAX-SMART WITHDRAWALS AND REBALANCING
HOLDING PERIOD MANAGEMENT
PORTFOLIO TRANSITION MANAGEMENT
EFFICIENT GIFTING STRATEGIES
EFFICIENT GIFTING STRATEGIES
PORTFOLIO TRANSITION MANAGEMENT
HOLDING PERIOD MANAGEMENT
TAX-SMART WITHDRAWALS AND REBALANCING
TAX-LOT COORDINATION
TAX-MANAGED PORTFOLIO DESIGN
TAX-LOSS HARVESTING
portfolio after taxes
$2,957,721
Results will vary as the amount of federal income tax paid depends on both the investor's tax bracket and how long the investment is held. Parametric Portfolio Associates: Based on a hypothetical tax-free $100,000 portfolio invested 60% in stocks (based on the Russell 3000) and 40% in bonds (based on the Bloomberg Barclays Aggregate). Assumptions: (1) no liquidations. (2) interest income and dividends taxed annually at current top marginal tax rates. (3) capital gains realized 50% per year and taxed at the current long-term capital gains tax rate. (4) portfolio held for 42 years (from 1979-2021). The intent is to portray a worst-case scenario. The portfolio would have grown from $100,000 to about $7.8 million. If the portfolio was taxed as indicated above, it would have lost 62% of its value, due to taxes paid and earnings lost on that money.
Tax-managed investment strategies are designed to minimize capital gains distributions and maximize after-tax returns. Past performance is no guarantee of future results.
There are risks involved with investing, including loss of principal. Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
Performance is past performance. Past performance is no guarantee of future performance.
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
Did you know that your taxes can be significantly impacted by the amount of time you hold onto an investment before you sell it?
1.
YES
NO
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
Did you know that your taxes can be significantly impacted by the amount of time you hold onto an investment before you sell it?
1.
YES
NO
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
When you sell an asset for more than what you paid, you create a gain—your profit. Gains are taxed differently depending on whether you held the asset for more or less than a year before selling it.
Do you know what your after-tax return is?
2.
YES
NO
As we see in the chart, taxes can reduce returns by as much as 60% over time. And taxes impact every investor, regardless of income level.
As we see in the chart, taxes can reduce returns by as much as 60% over time. And taxes impact every investor, regardless of income level.
Efficient Gifting Strategies
Gifting strategies can be implemented a number of ways and can be useful to help reduce tax liabilities in a single year and over time. Your financial advisor can assist you with creating a charitable gifting plan and/or to establish and give in a tax-efficient way to a donor-advised fund.
Portfolio Transition Management
Portfolio transition management happens when you are able to transfer assets from one investment portfolio to another, as opposed to selling them from one portfolio and buying them in the other portfolio. Keeping a portion of the investments intact creates a foundation to build on and helps avoid triggering a tax liability.
Holding Period Management
Capital gains realization strategies can help spread investment gains out over time to ease the tax impact. Capital gains are realized when you sell an asset for more than you purchased it for. That profit you’ve earned will be taxed differently, depending on how long you held that asset before you sold it.
Tax-Smart Withdrawals and Rebalancing
Tax-smart withdrawals and rebalancing means optimizing trades to sell assets whenever they need to be sold—whether it’s to generate income or to rebalance your asset mix. Optimizing could mean reducing the number of trades to avoid excessive tax liability or selling assets with lower levels of gains.
Tax-Smart Withdrawals and Rebalancing
Tax-smart withdrawals and rebalancing means optimizing trades to sell assets whenever they need to be sold—whether it’s to generate income or to rebalance your asset mix. Optimizing could mean reducing the number of trades to avoid excessive tax liability or selling assets with lower levels of gains.
Tax Lot Coordination
Tax lot coordination begins with each tax lot, which is a record of each transaction and its tax implications within your portfolio. Tax lot accounting is a technique that tracks every tax lot in your portfolio and strategically identifies which tax lots to sell based on the holding period and gain or loss.
EFFICIENT GIFTING STRATEGIES
PORTFOLIO TRANSITION MANAGEMENT
HOLDING PERIOD MANAGEMENT
TAX-SMART WITHDRAWALS AND REBALANCING
TAX-LOT COORDINATION
TAX-MANAGED PORTFOLIO DESIGN
TAX-LOSS HARVESTING
SM
Building brave futures.