# Roth Alternative for Tax Savings

> A $750,000 dividend portfolio loses $13,920 yearly to taxes without a Roth conversion.
- Title: Roth Alternative for Tax Savings · 24/7 Wall St. | Shortify
- Summary: A $750,000 dividend portfolio loses $13,920 yearly to taxes without a Roth conversion. Taxable BDCs and REITs cost $13,920 annually in federal taxes at 24%…
- Keywords: roth ira, taxable account, bdc, reit, dividend portfolio, federal taxes, 24% tax bracket, Roth, Alternative, Tax, Savings, 24/7 Wall St.
- Source: 24/7 Wall St. — https://247wallst.com/investing/2026/10/20/a-750000-dividend-portfolio-could-lose-13920-a-year-to-taxes-heres-the-roth-alternative
- Author: Chris Lange
- Published: 2026-10-20T16:45:26+00:00
- Read time: 1 min
- Topics: roth ira, taxable account, bdc, reit, dividend portfolio, federal taxes, 24% tax bracket
## Tax Cost of Dividend Portfolios
A $750,000 portfolio split evenly across three high-yield stocks loses $13,920 yearly to federal taxes in taxable accounts.
## Roth IRA Advantage
Roth IRA avoids $13,920 annual tax cost, saving $139,200 over ten years with no growth.
## High-Yield Stocks Example
Ares Capital, Main Street Capital, and Agree Realty each pay dividends taxed as ordinary income at 24% federal bracket.
## Tax Bracket Impact
At 24% federal tax bracket, $44,080 annual income becomes $44,080 net in Roth versus $30,160 in taxable accounts.
## Compounding Effect
Reinvested at 4%, $13,920 annual savings grows to $415,000 over twenty years without price appreciation.
## Tax Savings Strategy
Convert high-yielding taxable BDCs and REITs to Roth IRA before tax filing to reduce annual tax costs.
## Key takeaway

Taxable BDCs and REITs cost $13,920 annually in federal taxes at 24% bracket versus Roth IRA savings.