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No. of Recommendations: 1
We already have most of our Roth funds with Vanguard in the VTSMX so your recommendation makes sense to me. Now that I know I can just set things up to go into what Vanguard calls a 'general' mutual fund (vs. IRA or UMT)what should I expect regarding taxes? If I request the dividends to be reinvested do I still pay taxes on those reinvested dividends or is it deferred until we take the money out? Just thinking ahead for our taxes next year. We expect to invest for the long term, hopefully 20 properous years or so.
Not sure what a 'Tax-Managed Fund will do for me, I am unfamiliar with how they work. I would love to hear about its pros and cons.

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Yes, just indicate that you wish to open a regular, taxable account in which you will invest in VTSMX (or whatever). Assuming that you hold the shares and do not sell, your taxes arising from this investment will be minimal. Yes, you will have to pay taxes on reinvested dividends/distributions, but they will likely be miniscule unless you develop a very large portfolio (millions). If you are buying and holding an index fund, I cannot imagine that a "tax managed" fund would be much better.
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