Taxes take a rather big bite from your investment returns. Therefore, it's important that you know how the tax system works, in general, in order to hang on to as much of your returns as possible.

Avoid being tempted solely by good historical performance of an investment. It's important to know if an investment is also tax-efficient.

When investing take a good look at your taxable-equivalent yield.

This gives you a better benchmark of how your investment will perform, and allows you to factor in your tax rate when looking at the investment's performance.