Tax-saving tip: Put your investments in the right place

To take best advantage of the lower long-term capital gains tax rates, investments that produce capital gains should be held in taxable accounts and those that produce interest income should be held in tax-deferred accounts (like your IRA or 401(k) plan). If you put capital gain investments in tax-deferred retirement accounts, you could turn income that would be taxed at lower rates into ordinary income taxed at higher rates.