3 Easy Ways to Get Tax-Free Income

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As the end of the year approaches, smart taxpayers start thinking about ways to reduce their tax bill. One way is to take advantage of the many types of tax-free income that are available to investors. But how can you find those investments and make the most of them?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, answers that question by giving three easy ways that investors can take advantage of tax-law provisions to boost their tax-free income. He discusses municipal bonds, which are available both individually and in ETFs like the iShares National AMT-Free Muni ETF , the Pimco Intermediate Muni ETF , and SPDR Nuveen Barclays Muni ETF .

Dan goes on to talk about two other opportunities. One involves taking advantage of the 0% tax on capital gains and dividend income for those in the 10% and 15% tax brackets. The other comes from using special retirement, education, and health-care accounts to get tax-free growth on your investments. By making the most of tax-free opportunities, you can reduce the amount you pay to the IRS next April.

Be smart about your taxes
Getting more tax-free income is just one way you can help reduce your bill to Uncle Sam. In our brand-new special report "How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.

The article 3 Easy Ways to Get Tax-Free Income originally appeared on Fool.com.

Fool contributor Dan Caplinger and The Motley Fool have no position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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