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How do you determine my tax level?
We use your self-reported tax filing status, household income, and state of residence and apply the standard deduction to determine your tax level. This information allows us to estimate your federal and state tax rates, which we then use to recommend the tax level. The tax level will inform the investment mix that we believe can help maximize your after-tax returns.
The tax level we recommend for you may vary depending on the portfolio type. We design tax levels to best reflect the type of tax exemptions that each portfolio type may have. It is possible for your tax level to vary between your portfolios because each portfolio has a different composition, and you may benefit differently tax-wise from different accounts. For example, you may have a high tax level for your Automated Investing Account, but a medium tax level for your Automated Bond Portfolio. If you believe your portfolio should have a different tax level, you can update it any time.
To learn more about how we determine tax levels for each portfolio, please see our white papers.
Wealthfront Advisers and its affiliates do not provide legal or tax advice and do not assume any liability for the tax consequences of any client transaction. Clients should consult with their personal tax advisors regarding the tax consequences of investing with Wealthfront Advisers and engaging in these tax 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 investor’s personal tax returns. Wealthfront Advisers assumes no responsibility for the tax consequences to any investor of any transaction.
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