Retirement and Tax Terms
Taxable Account
An investment account where gains, losses, and income may create tax consequences.
Also called: non-retirement account
What it means
A taxable account is a regular investment account that does not automatically receive the special tax treatment of accounts such as IRAs or 401(k)s. Depending on the rules, dividends, interest, and realized gains may affect taxes in the year they occur.
Why it matters
Two investments with the same return can have different after-tax outcomes depending on the account they are held in.