It is virtually impossible to make an investment transaction without there be a corresponding income tax consequence. With a CPA background, we have a thorough understanding of income tax law and how it impacts your long-term investment performance.
The most important number to review is not the rate of return or dollar amount that you earn, but rather the rate of return and dollar amount that you keep that matters. The higher your marginal income tax bracket, the more you need to focus on the impact of income taxes.
But even for investors in the lowest income tax bracket, the tax impact on a portfolio is significant and should not be ignored. Unfortunately, too many investors and their advisors simply do not have a comprehensive understanding of the impact of income taxes and their impact on their investment portfolio.
The area of income taxes and their impact on an investment portfolio is a perfect illustration of why your financial advisor should be a financial professional and not a financial salesperson.