After-Tax Return

Dictionary Says

Definition of 'After-Tax Return'

The return on an investment including all income received and capital gains, calculated by taking expected or paid income taxes into account. Generally reserved for returns on positions that have been closed out or sold, after-tax returns are also used to evaluate the after-tax yields of municipal versus corporate and government bonds because municipals are free from federal income taxes.


Investopedia Says

Investopedia explains 'After-Tax Return'

After-tax returns serve to level the playing field, breaking down performance data into “real life” form for the individual investor. Investors in the highest tax brackets will often look to investments, such as municipals and high-yielding stocks (dividends are taxed at a lower rate than capital gains) to aid in boosting after-tax returns. People who trade stocks frequently are subject to the highest tax rates on capital gains, and after-tax returns will suffer unless the investor makes very profitable trades. 


Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Federal Tax Brackets

    Income tax ...
  2. Federal Income Tax

    A tax levied by ...
  3. Capital Gains Treatment

    The specific ...
  4. Ordinary Income

    Income received ...
  5. Municipal Bond

    A debt security ...
  6. Pretax Profit Margin

    A company's ...
  7. Agency Bond

    A bond issued by ...
  8. Convertible Arbitrage

    An investing ...
  9. Liquidation

    1. When a ...
  10. Canada Savings Bond - CSB

    A financial ...

Articles Of Interest

  1. After-Tax Balance Rules For Retirement Accounts

    Accumulating post-tax assets can work to your advantage. Find out how.
  2. Benchmark Your Returns With Indexes

    If your portfolio is always falling short, you may not be making an apples-to-apples comparison.
  3. Selling Losing Securities For A Tax Advantage

    Tax-loss harvesting can help you to reduce taxes on your portfolio gains, but make sure you know the rules!
  4. This Is Your Brain On Stocks

    Find out how the human mind can hurt investors' portfolios.
  5. Should You Invest Your Entire Portfolio In Stocks?

    It is true that stocks outperform bonds and cash in the long run, but that statistic doesn't tell the whole story.
  6. 5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  7. 5 Popular Portfolio Types

    Learning how to build these portfolios will increase your investing confidence and give you financial control.
  8. How To Invest When You're Deep In Debt

    Debt is one of the biggest obstacles that prevents people from investing - but it shouldn't be.
  9. Finding Your Investing Comfort Zone

    Choosing the right investments for you is the best way to feel comfortable with your portfolio.
  10. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center