Posts by SmartAsset Team
Tax Credits & Deductions
Tax Credits and Deductions for Home Improvements
Home improvements can make your home more comfortable, raise its value and lower energy costs over time. Some projects may also qualify for tax credits or deductions. These tax breaks can reduce what you owe when you file your taxes. In other cases, the cost of improvements can increase your home’s cost basis. That may… read more…
Tax Planning
How Paying Off Your Mortgage Early Can Affect Your Taxes
Paying off your mortgage early saves you money on interest but it can also change your tax situation. Once the mortgage is gone you lose the mortgage interest deduction, which may reduce the total amount you can itemize on your tax return. That could mean a higher taxable income than you expected. You also need… read more…
Investment Taxes
Realized vs. Unrealized Gains: Tax Timing and Reporting Rules
Tracking your portfolio growth, is important but knowing when your gains become taxable is just as critical. There is a key difference between gains you have locked in by selling and gains that only exist on paper. This distinction between realized and unrealized gains drives most of the tax decisions investors face. Selling a stock… read more…
Investment Taxes
Long-Term Stock Investments: Tax Rules and Growth
Buying stocks is one thing but knowing how to hold them over time is what builds real wealth. Long-term investing gives you the benefit of compounding growth, lower taxes on gains and less exposure to short-term market swings. Short-term trading doesn’t offer those same advantages and often costs more in fees and taxes. The longer… read more…
Tax Planning
Federal Tax vs. State Tax: Definitions and Examples
Most people see taxes come out of their paycheck without thinking much about where the money goes. Federal taxes follow one set of rules no matter where you live, but state taxes vary widely depending on your location. Some states have no income tax at all while others take a significant cut. These differences affect… read more…
Tax Planning
Sales Tax vs. Use Tax: Definitions and Examples
Most people are used to seeing sales tax on a receipt, but not every purchase includes it. When it doesn’t, you may still owe tax on that purchase through what’s called a use tax. This comes up most often with online shopping, out-of-state purchases and private sales. Understanding the difference between sales tax and use… read more…
Advisor Basics
Financial Counselor vs. Financial Advisor: Services and Examples
If you are looking for professional help with your money, it helps to know the difference between a financial counselor and a financial advisor. These two roles sound similar but they focus on different things. A financial counselor typically works with people on budgeting, debt and day-to-day money management. A financial advisor focuses on investing,… read more…
Investing for Beginners
5 High-Yield Investments That Are Considered Safe
Safe high-yield investments often include government-backed securities, high-quality bonds and income-producing equities. These assets can be preferable because they offer predictable payments over time. While higher yields could improve your income potential, no investment is completely risk-free. Factors such as credit quality, diversification and market conditions all influence how safe an investment may be. Investors… read more…
Financial Planning
Financial Planning for Millionaires: Services and Examples
Millionaires face distinct financial challenges that require specialized strategies beyond basic money management. Financial planning for millionaires encompasses investment portfolio diversification, tax optimization, estate planning and wealth preservation across generations. The right planning approach can help high-net-worth individuals maximize returns while minimizing tax liabilities and protecting assets from potential threats. Whether you’re focused on tax… read more…
Financial Planning
Financial Planning for Widows: Milestones, Services and Examples
Financial planning for widows addresses the shift from managing money as a couple to making all financial decisions independently after the loss of a spouse. This transition involves understanding how income sources, tax obligations and account structures change when a spouse passes away. As part of the process, it’s necessary to evaluate new benefit options,… read more…
How to Invest
Buy Write Strategy: Definition and Examples
A buy write strategy is an options trading approach that involves purchasing shares of a stock while simultaneously selling a call option on those same shares. This allows investors to collect an option premium upfront while maintaining ownership of the stock. Investors commonly use the buy write strategy to generate income, particularly in neutral or… read more…
Trusts
How Long Does It Take to Set Up a Trust? Timeline Overview
Setting up a trust can be an important step in estate planning, helping you manage assets, protect beneficiaries and simplify the transfer of wealth. The timeline for setting one up, however, can vary depending on the type of trust, the complexity of your estate and whether you work with an attorney or use an online… read more…
Trusts
Tax Implications of Putting an Investment Account in a Trust: Rules and Requirements
Placing an investment account in a trust can help manage assets and streamline inheritance, but it also introduces specific tax rules and reporting requirements. The tax implications depend on the type of trust, how investment income is handled and whether the trust or its beneficiaries are responsible for paying taxes. Income generated within a trust… read more…
Tax Planning
Tax Implications of Buy-to-Let Investments: Rules and Requirements
While buy-to-let real estate can generate steady cash flow and long-term appreciation, it also introduces specific tax rules, reporting requirements and potential liabilities. Rental income is generally taxable, but investors may qualify for deductions that reduce their overall tax burden. These can include expenses like mortgage interest, maintenance, depreciation and property management fees. Investors must… read more…
Tax Credits & Deductions
2026 Child and Dependent Care Tax Credit: What Will You Receive?
The Child and Dependent Care Tax Credit helps offset the costs of care for children under 13 and other qualifying dependents while you work or look for work. For 2026, you can claim a percentage of up to $3,000 in care expenses for one dependent, or $6,000 for two or more dependents. Thanks to recent… read more…
Tax Credits & Deductions
What Is the Credit for Other Dependents?
The Credit for Other Dependents provides a $500 tax benefit for qualifying dependents who don’t meet the requirements for the Child Tax Credit. This credit covers dependents age 17 or older, including adult children, elderly parents and other relatives who rely on your financial support. Unlike the Child Tax Credit, this credit is nonrefundable, meaning… read more…
Tax Planning
Do You Have to Report Inheritance on Your Taxes? Rules for Beneficiaries
Whether you have to report an inheritance on your taxes depends on what you inherit and the subsequent handling of that inheritance. While inheritances themselves are often not subject to federal income tax, certain inherited assets can generate taxable income once they begin producing interest, dividends or distributions. Because inheritance decisions can affect long-term tax… read more…
Tax Planning
Tax Implications of Adding a Child to a Deed: Rules and Tips
While adding a child to a deed may seem straightforward, the tax implications can be complex and long-lasting. Depending on how you structure the transfer, it may affect gift taxes, capital gains taxes, and future estate planning outcomes. State laws and ownership structures can also influence the results. A financial advisor can help you evaluate… read more…
Tax Planning
Tax Implications of Adding a Spouse to a Deed: Rules and Tips
While the process of adding a spouse to a deed can be relatively simple, there are some tax implications that make it more complicated. Depending on how you handle the property transfer, it can affect gift taxes, capital gains taxes, and estate planning outcomes later on. State laws and ownership structures can also play a… read more…
Retirement Planning
5 Investments That Can Add Income After You Retire
Once you retire, the purpose of your investment portfolio often changes. Instead of concentrating primarily on growth, many retirees focus on generating reliable income to supplement Social Security, pensions or other sources of income. Choosing the right investments to add income after retiring can help support day-to-day expenses while managing risk in a portfolio that… read more…
Derivatives Markets
Collar Options Strategies: Pros, Cons and Examples
A collar options strategy protects stock holdings from significant losses while limiting potential gains. Investors create a collar by owning shares of a stock. They then purchase a put option below the current price and sell a call option above it. The premium collected from selling the call option typically offsets most or all of… read more…
Tax Policy
Excise Tax vs. Sales Tax: How Are They Different?
Excise taxes and sales taxes both generate government revenue, but they work in fundamentally different ways. Sales taxes apply broadly to most retail purchases at a uniform percentage rate, appearing as a line item at checkout. Excise taxes, by contrast, target specific goods, like gasoline, tobacco and alcohol, and are often incorporated into the product’s… read more…
Retirement Planning
5 Investments to Consider 10 Years Before Retirement
At 10 years before retirement, investment priorities often begin to shift. The focus typically moves from maximizing growth to protecting accumulated savings while managing risk and preparing for future income. Portfolios at this stage commonly combine growth-oriented assets with stabilizing investments to help limit volatility and support a smoother transition into retirement spending. No matter… read more…
Retirement Planning
5 Investments to Consider Midway to Retirement
Being midway to retirement means you may still have years of earnings ahead. However, the margin for error is smaller than it was earlier in your career. Choosing investments typically involves balancing continued growth with a growing emphasis on risk management and future income. At this stage, you want to protect your progress while positioning… read more…
Trusts
Tax Implications of Transferring Property into a Trust
Transferring property into a trust is an estate planning decision that can affect taxes during your lifetime and beneficiaries later. The tax treatment depends on how the trust is structured and how the property is classified. Gift taxes, capital gains and estate taxes may apply differently depending on the situation. Understanding how property transfers to… read more…