I have my tax advantaged accounts and then my taxable brokerage account. I'm just interested in how to setup my taxable account the best for the long term. I have decided on these general ETF's to use.
15% S&P 500 ETF (VOO vs IVV)
60% Total US Stock Market ETF (ITOT VS VTI)
25% Total International ETF (IXUS vs VXUS)
I've decided to leave out bonds for now in my taxable account. Bonds tend to be pretty tax inefficient and I don't love muni bonds(which are more efficient). At some point I'll likely add a little or skew my tax advantaged bonds a little higher. Realistically I'll do just a little of both in the future.
For now though, I like to be more US based with some international around 75/25. While total US stock market includes the S&P 500, I do like to add some tilt to S&P 500 which is why I have 15% of S&P 500 ETF. I'm open to shifting these ratios a little, so let me know your reasoning if you think so.
This leads me to picking the best ETF for my situation, and I'm mainly down to vanguards version vs iShares version (open to other suggestions too). The commission on all of these are free. The expense ratio for all of them are .03%. All of them are very similar.
This leads me to really the most important and last point since they are so similar, which one is the most tax efficient? This is where it gets a little more uncertain for me. It appears that they have a similar dividend, but Vanguard's are more consistently qualified dividends (so I would be paying capital gains tax compared to regular income tax) compared to iShares which appears too have been giving more non-qualified dividends lately. This leads me to going towards vanguards over iShares. Is there any other tax considerations (or any considerations at all) I should be looking at in regards to these 6 ETF's?
Submitted November 02, 2021 at 10:24AM by bb0110 https://ift.tt/3bB6ccU
