diff --git a/packages/desktop-client/src/components/tags/ManageTags.tsx b/packages/desktop-client/src/components/tags/ManageTags.tsx
index d65e01b55b..36a941e76b 100644
--- a/packages/desktop-client/src/components/tags/ManageTags.tsx
+++ b/packages/desktop-client/src/components/tags/ManageTags.tsx
@@ -22,16 +22,17 @@ import {
   useSelected,
 } from '@desktop-client/hooks/useSelected';
 import { useTags } from '@desktop-client/hooks/useTags';
-import { useDispatch } from '@desktop-client/redux';
-import { deleteAllTags, findTags } from '@desktop-client/tags/tagsSlice';
+import {
+  useDeleteTagsMutation,
+  useDiscoverTagsMutation,
+} from '@desktop-client/tags';
 
 export function ManageTags() {
   const { t } = useTranslation();
-  const dispatch = useDispatch();
   const [filter, setFilter] = useState('');
   const [hoveredTag, setHoveredTag] = useState<string>();
   const [create, setCreate] = useState(false);
-  const tags = useTags();
+  const { data: tags = [] } = useTags();
 
   const filteredTags = useMemo(() => {
     return filter === ''
@@ -43,10 +44,19 @@ export function ManageTags() {
 
   const selectedInst = useSelected('manage-tags', filteredTags, []);
 
+  const { mutate: discoverTags } = useDiscoverTagsMutation();
+  const { mutate: deleteTags } = useDeleteTagsMutation();
+
   const onDeleteSelected = useCallback(async () => {
-    dispatch(deleteAllTags([...selectedInst.items]));
-    selectedInst.dispatch({ type: 'select-none' });
-  }, [dispatch, selectedInst]);
+    deleteTags(
+      { ids: [...selectedInst.items] },
+      {
+        onSuccess: () => {
+          selectedInst.dispatch({ type: 'select-none' });
+        },
+      },
+    );
+  }, [deleteTags, selectedInst]);
 
   return (
     <SelectedProvider instance={selectedInst}>
@@ -75,7 +85,7 @@ export function ManageTags() {
             <SvgAdd width={10} height={10} style={{ marginRight: 3 }} />
             <Trans>Add New</Trans>
           </Button>
-          <Button variant="bare" onPress={() => dispatch(findTags())}>
+          <Button variant="bare" onPress={() => discoverTags()}>
             <SvgSearchAlternate
               width={10}
               height={10}
diff --git a/packages/desktop-client/src/components/tags/TagCreationRow.tsx b/packages/desktop-client/src/components/tags/TagCreationRow.tsx
index f05580d80b..4823ee0a14 100644
--- a/packages/desktop-client/src/components/tags/TagCreationRow.tsx
+++ b/packages/desktop-client/src/components/tags/TagCreationRow.tsx
@@ -18,8 +18,7 @@ import {
 import { useInitialMount } from '@desktop-client/hooks/useInitialMount';
 import { useProperFocus } from '@desktop-client/hooks/useProperFocus';
 import { useTagCSS } from '@desktop-client/hooks/useTagCSS';
-import { useDispatch } from '@desktop-client/redux';
-import { createTag } from '@desktop-client/tags/tagsSlice';
+import { useCreateTagMutation } from '@desktop-client/tags';
 
 type TagCreationRowProps = {
   tags: TagEntity[];
@@ -28,7 +27,6 @@ type TagCreationRowProps = {
 
 export const TagCreationRow = ({ onClose, tags }: TagCreationRowProps) => {
   const { t } = useTranslation();
-  const dispatch = useDispatch();
   const [tag, setTag] = useState('');
   const [description, setDescription] = useState('');
   const [color, setColor] = useState<string | null>(null);
@@ -67,12 +65,14 @@ export const TagCreationRow = ({ onClose, tags }: TagCreationRowProps) => {
     );
   };
 
+  const { mutate: createTag } = useCreateTagMutation();
+
   const onAddTag = () => {
     if (!isTagValid()) {
       return;
     }
 
-    dispatch(createTag({ tag, color, description }));
+    createTag({ tag: { tag, color, description } });
     resetInputs();
   };
 
diff --git a/packages/desktop-client/src/components/tags/TagEditor.tsx b/packages/desktop-client/src/components/tags/TagEditor.tsx
index 1f5b071872..4ed6605ff6 100644
--- a/packages/desktop-client/src/components/tags/TagEditor.tsx
+++ b/packages/desktop-client/src/components/tags/TagEditor.tsx
@@ -6,8 +6,7 @@ import { ColorPicker } from '@actual-app/components/color-picker';
 import type { TagEntity } from 'loot-core/types/models';
 
 import { useTagCSS } from '@desktop-client/hooks/useTagCSS';
-import { useDispatch } from '@desktop-client/redux';
-import { updateTag } from '@desktop-client/tags/tagsSlice';
+import { useUpdateTagMutation } from '@desktop-client/tags';
 
 type TagEditorProps = {
   tag: TagEntity;
@@ -15,8 +14,8 @@ type TagEditorProps = {
 };
 
 export const TagEditor = ({ tag, ref }: TagEditorProps) => {
-  const dispatch = useDispatch();
   const getTagCSS = useTagCSS();
+  const { mutate: updateTag } = useUpdateTagMutation();
 
   const formattedTag = <>#{tag.tag}</>;
 
@@ -24,7 +23,7 @@ export const TagEditor = ({ tag, ref }: TagEditorProps) => {
     <ColorPicker
       value={tag.color ?? undefined}
       onChange={color => {
-        dispatch(updateTag({ ...tag, color: color.toString('hex') }));
+        updateTag({ tag: { ...tag, color: color.toString('hex') } });
       }}
     >
       <Button variant="bare" className={getTagCSS(tag.tag)} ref={ref}>
diff --git a/packages/desktop-client/src/components/tags/TagRow.tsx b/packages/desktop-client/src/components/tags/TagRow.tsx
index 0eecab21aa..7cdc4b4af3 100644
--- a/packages/desktop-client/src/components/tags/TagRow.tsx
+++ b/packages/desktop-client/src/components/tags/TagRow.tsx
@@ -22,8 +22,10 @@ import { useContextMenu } from '@desktop-client/hooks/useContextMenu';
 import { useNavigate } from '@desktop-client/hooks/useNavigate';
 import { useProperFocus } from '@desktop-client/hooks/useProperFocus';
 import { useSelectedDispatch } from '@desktop-client/hooks/useSelected';
-import { useDispatch } from '@desktop-client/redux';
-import { deleteTag, updateTag } from '@desktop-client/tags/tagsSlice';
+import {
+  useDeleteTagMutation,
+  useUpdateTagMutation,
+} from '@desktop-client/tags';
 
 type TagRowProps = {
   tag: TagEntity;
@@ -37,7 +39,6 @@ type TagRowProps = {
 export const TagRow = memo(
   ({ tag, hovered, selected, onHover, focusedField, onEdit }: TagRowProps) => {
     const { t } = useTranslation();
-    const dispatch = useDispatch();
     const dispatchSelected = useSelectedDispatch();
     const borderColor = selected ? theme.tableBorderSelected : 'none';
 
@@ -50,9 +51,11 @@ export const TagRow = memo(
     const { setMenuOpen, menuOpen, handleContextMenu, position } =
       useContextMenu();
     const navigate = useNavigate();
+    const { mutate: updateTag } = useUpdateTagMutation();
+    const { mutate: deleteTag } = useDeleteTagMutation();
 
     const onUpdate = (description: string) => {
-      dispatch(updateTag({ ...tag, description }));
+      updateTag({ tag: { ...tag, description } });
     };
 
     const onShowActivity = () => {
@@ -108,7 +111,7 @@ export const TagRow = memo(
             onMenuSelect={name => {
               switch (name) {
                 case 'delete':
-                  dispatch(deleteTag(tag));
+                  deleteTag({ id: tag.id });
                   break;
                 default:
                   throw new Error(`Unrecognized menu option: ${name}`);
diff --git a/packages/desktop-client/src/hooks/useTagCSS.ts b/packages/desktop-client/src/hooks/useTagCSS.ts
index b8a29c8547..25efdaba68 100644
--- a/packages/desktop-client/src/hooks/useTagCSS.ts
+++ b/packages/desktop-client/src/hooks/useTagCSS.ts
@@ -10,7 +10,7 @@ import { useTags } from './useTags';
 import { useTheme } from '@desktop-client/style';
 
 export function useTagCSS() {
-  const tags = useTags();
+  const { data: tags = [] } = useTags();
   const [theme] = useTheme();
 
   return useCallback(
diff --git a/packages/desktop-client/src/hooks/useTags.ts b/packages/desktop-client/src/hooks/useTags.ts
index aa2b800873..7856084c92 100644
--- a/packages/desktop-client/src/hooks/useTags.ts
+++ b/packages/desktop-client/src/hooks/useTags.ts
@@ -1,20 +1,7 @@
-import { useEffect } from 'react';
+import { useQuery } from '@tanstack/react-query';
 
-import { useInitialMount } from './useInitialMount';
-
-import { useDispatch, useSelector } from '@desktop-client/redux';
-import { getTags } from '@desktop-client/tags/tagsSlice';
+import { tagQueries } from '@desktop-client/tags/queries';
 
 export function useTags() {
-  const dispatch = useDispatch();
-  const isInitialMount = useInitialMount();
-  const isTagsDirty = useSelector(state => state.tags.isTagsDirty);
-
-  useEffect(() => {
-    if (isInitialMount || isTagsDirty) {
-      dispatch(getTags());
-    }
-  }, [dispatch, isInitialMount, isTagsDirty]);
-
-  return useSelector(state => state.tags.tags);
+  return useQuery(tagQueries.list());
 }
diff --git a/packages/desktop-client/src/index.tsx b/packages/desktop-client/src/index.tsx
index c2ba6d4bbf..b3ffe6e932 100644
--- a/packages/desktop-client/src/index.tsx
+++ b/packages/desktop-client/src/index.tsx
@@ -27,7 +27,6 @@ import * as payeesSlice from './payees/payeesSlice';
 import * as prefsSlice from './prefs/prefsSlice';
 import { aqlQuery } from './queries/aqlQuery';
 import { configureAppStore } from './redux/store';
-import * as tagsSlice from './tags/tagsSlice';
 import * as transactionsSlice from './transactions/transactionsSlice';
 import { redo, undo } from './undo';
 import * as usersSlice from './users/usersSlice';
@@ -47,7 +46,6 @@ const boundActions = bindActionCreators(
     ...payeesSlice.actions,
     ...prefsSlice.actions,
     ...transactionsSlice.actions,
-    ...tagsSlice.actions,
     ...usersSlice.actions,
   },
   store.dispatch,
diff --git a/packages/desktop-client/src/redux/store.ts b/packages/desktop-client/src/redux/store.ts
index cde99e18ef..170a8df092 100644
--- a/packages/desktop-client/src/redux/store.ts
+++ b/packages/desktop-client/src/redux/store.ts
@@ -35,10 +35,6 @@ import {
   name as prefsSliceName,
   reducer as prefsSliceReducer,
 } from '@desktop-client/prefs/prefsSlice';
-import {
-  name as tagsSliceName,
-  reducer as tagsSliceReducer,
-} from '@desktop-client/tags/tagsSlice';
 import {
   name as transactionsSliceName,
   reducer as transactionsSliceReducer,
@@ -57,7 +53,6 @@ const rootReducer = combineReducers({
   [payeesSliceName]: payeesSliceReducer,
   [prefsSliceName]: prefsSliceReducer,
   [transactionsSliceName]: transactionsSliceReducer,
-  [tagsSliceName]: tagsSliceReducer,
   [usersSliceName]: usersSliceReducer,
 });
 
diff --git a/packages/desktop-client/src/tags/index.ts b/packages/desktop-client/src/tags/index.ts
new file mode 100644
index 0000000000..d0720956a0
--- /dev/null
+++ b/packages/desktop-client/src/tags/index.ts
@@ -0,0 +1,2 @@
+export * from './queries';
+export * from './mutations';
diff --git a/packages/desktop-client/src/tags/mutations.ts b/packages/desktop-client/src/tags/mutations.ts
new file mode 100644
index 0000000000..db55fa2070
--- /dev/null
+++ b/packages/desktop-client/src/tags/mutations.ts
@@ -0,0 +1,158 @@
+import { useTranslation } from 'react-i18next';
+
+import { useMutation, useQueryClient } from '@tanstack/react-query';
+import type { QueryClient, QueryKey } from '@tanstack/react-query';
+import { v4 as uuidv4 } from 'uuid';
+
+import { send } from 'loot-core/platform/client/connection';
+import type { TagEntity } from 'loot-core/types/models';
+
+import { tagQueries } from './queries';
+
+import { addNotification } from '@desktop-client/notifications/notificationsSlice';
+import { useDispatch } from '@desktop-client/redux';
+import type { AppDispatch } from '@desktop-client/redux/store';
+
+function invalidateQueries(queryClient: QueryClient, queryKey?: QueryKey) {
+  queryClient.invalidateQueries({
+    queryKey: queryKey ?? tagQueries.lists(),
+  });
+}
+
+function dispatchErrorNotification(
+  dispatch: AppDispatch,
+  message: string,
+  error?: Error,
+) {
+  dispatch(
+    addNotification({
+      notification: {
+        id: uuidv4(),
+        type: 'error',
+        message,
+        pre: error ? error.message : undefined,
+      },
+    }),
+  );
+}
+
+type CreateTagPayload = {
+  tag: Omit<TagEntity, 'id'>;
+};
+
+export function useCreateTagMutation() {
+  const queryClient = useQueryClient();
+  const dispatch = useDispatch();
+  const { t } = useTranslation();
+
+  return useMutation({
+    mutationFn: async ({ tag }: CreateTagPayload) => {
+      return await send('tags-create', tag);
+    },
+    onSuccess: () => invalidateQueries(queryClient),
+    onError: error => {
+      console.error('Error creating tag:', error);
+      dispatchErrorNotification(
+        dispatch,
+        t('There was an error creating the tag. Please try again.'),
+        error,
+      );
+    },
+  });
+}
+
+type UpdateTagPayload = {
+  tag: TagEntity;
+};
+
+export function useUpdateTagMutation() {
+  const queryClient = useQueryClient();
+  const dispatch = useDispatch();
+  const { t } = useTranslation();
+
+  return useMutation({
+    mutationFn: async ({ tag }: UpdateTagPayload) => {
+      return await send('tags-update', tag);
+    },
+    onSuccess: () => invalidateQueries(queryClient),
+    onError: error => {
+      console.error('Error updating tag:', error);
+      dispatchErrorNotification(
+        dispatch,
+        t('There was an error updating the tag. Please try again.'),
+        error,
+      );
+    },
+  });
+}
+
+type DeleteTagPayload = {
+  id: TagEntity['id'];
+};
+
+export function useDeleteTagMutation() {
+  const queryClient = useQueryClient();
+  const dispatch = useDispatch();
+  const { t } = useTranslation();
+
+  return useMutation({
+    mutationFn: async ({ id }: DeleteTagPayload) => {
+      return await send('tags-delete', { id });
+    },
+    onSuccess: () => invalidateQueries(queryClient),
+    onError: error => {
+      console.error('Error deleting tag:', error);
+      dispatchErrorNotification(
+        dispatch,
+        t('There was an error deleting the tag. Please try again.'),
+        error,
+      );
+    },
+  });
+}
+
+type DeleteTagsPayload = {
+  ids: Array<TagEntity['id']>;
+};
+
+export function useDeleteTagsMutation() {
+  const queryClient = useQueryClient();
+  const dispatch = useDispatch();
+  const { t } = useTranslation();
+
+  return useMutation({
+    mutationFn: async ({ ids }: DeleteTagsPayload) => {
+      return await send('tags-delete-all', ids);
+    },
+    onSuccess: () => invalidateQueries(queryClient),
+    onError: error => {
+      console.error('Error deleting tags:', error);
+      dispatchErrorNotification(
+        dispatch,
+        t('There was an error deleting the tags. Please try again.'),
+        error,
+      );
+    },
+  });
+}
+
+export function useDiscoverTagsMutation() {
+  const queryClient = useQueryClient();
+  const dispatch = useDispatch();
+  const { t } = useTranslation();
+
+  return useMutation({
+    mutationFn: async () => {
+      return await send('tags-discover');
+    },
+    onSuccess: () => invalidateQueries(queryClient),
+    onError: error => {
+      console.error('Error discovering tags:', error);
+      dispatchErrorNotification(
+        dispatch,
+        t('There was an error discovering the tags. Please try again.'),
+        error,
+      );
+    },
+  });
+}
diff --git a/packages/desktop-client/src/tags/queries.ts b/packages/desktop-client/src/tags/queries.ts
new file mode 100644
index 0000000000..a7f40efd9a
--- /dev/null
+++ b/packages/desktop-client/src/tags/queries.ts
@@ -0,0 +1,20 @@
+import { queryOptions } from '@tanstack/react-query';
+
+import { send } from 'loot-core/platform/client/connection';
+import type { TagEntity } from 'loot-core/types/models';
+
+export const tagQueries = {
+  all: () => ['tags'],
+  lists: () => [...tagQueries.all(), 'lists'],
+  list: () =>
+    queryOptions<TagEntity[]>({
+      queryKey: [...tagQueries.lists()],
+      queryFn: async () => {
+        const tags: TagEntity[] = await send('tags-get');
+        return tags;
+      },
+      placeholderData: [],
+      // Manually invalidated when tags change
+      staleTime: Infinity,
+    }),
+};
diff --git a/packages/desktop-client/src/tags/tagsSlice.ts b/packages/desktop-client/src/tags/tagsSlice.ts
deleted file mode 100644
index ed8ff02cda..0000000000
--- a/packages/desktop-client/src/tags/tagsSlice.ts
+++ /dev/null
@@ -1,165 +0,0 @@
-import { createSlice } from '@reduxjs/toolkit';
-
-import { send } from 'loot-core/platform/client/connection';
-import type { TagEntity } from 'loot-core/types/models';
-
-import { resetApp } from '@desktop-client/app/appSlice';
-import { createAppAsyncThunk } from '@desktop-client/redux';
-
-const sliceName = 'tags';
-
-type TagsState = {
-  tags: TagEntity[];
-  isTagsLoading: boolean;
-  isTagsLoaded: boolean;
-  isTagsDirty: boolean;
-};
-
-const initialState: TagsState = {
-  tags: [],
-  isTagsLoading: false,
-  isTagsLoaded: false,
-  isTagsDirty: false,
-};
-
-const tagSlice = createSlice({
-  name: sliceName,
-  initialState,
-  reducers: {
-    markTagsDirty(state) {
-      _markTagsDirty(state);
-    },
-  },
-  extraReducers: builder => {
-    builder.addCase(resetApp, () => initialState);
-
-    builder.addCase(createTag.fulfilled, _markTagsDirty);
-    builder.addCase(deleteTag.fulfilled, _markTagsDirty);
-    builder.addCase(deleteAllTags.fulfilled, _markTagsDirty);
-    builder.addCase(updateTag.fulfilled, _markTagsDirty);
-
-    builder.addCase(reloadTags.fulfilled, (state, action) => {
-      _loadTags(state, action.payload);
-    });
-
-    builder.addCase(reloadTags.rejected, state => {
-      state.isTagsLoading = false;
-    });
-
-    builder.addCase(reloadTags.pending, state => {
-      state.isTagsLoading = true;
-    });
-
-    builder.addCase(getTags.fulfilled, (state, action) => {
-      _loadTags(state, action.payload);
-    });
-
-    builder.addCase(getTags.rejected, state => {
-      state.isTagsLoading = false;
-    });
-
-    builder.addCase(getTags.pending, state => {
-      state.isTagsLoading = true;
-    });
-
-    builder.addCase(findTags.fulfilled, (state, action) => {
-      _loadTags(state, action.payload);
-    });
-
-    builder.addCase(findTags.rejected, state => {
-      state.isTagsLoading = false;
-    });
-
-    builder.addCase(findTags.pending, state => {
-      state.isTagsLoading = true;
-    });
-  },
-});
-
-export const getTags = createAppAsyncThunk(
-  `${sliceName}/getTags`,
-  async () => {
-    const tags: TagEntity[] = await send('tags-get');
-    return tags;
-  },
-  {
-    condition: (_, { getState }) => {
-      const { tags } = getState();
-      return !tags.isTagsLoading && (tags.isTagsDirty || !tags.isTagsLoaded);
-    },
-  },
-);
-
-export const reloadTags = createAppAsyncThunk(
-  `${sliceName}/reloadTags`,
-  async () => {
-    const tags: TagEntity[] = await send('tags-get');
-    return tags;
-  },
-);
-
-export const createTag = createAppAsyncThunk(
-  `${sliceName}/createTag`,
-  async ({ tag, color, description }: Omit<TagEntity, 'id'>) => {
-    const id = await send('tags-create', { tag, color, description });
-    return id;
-  },
-);
-
-export const deleteTag = createAppAsyncThunk(
-  `${sliceName}/deleteTag`,
-  async (tag: TagEntity) => {
-    const id = await send('tags-delete', tag);
-    return id;
-  },
-);
-
-export const deleteAllTags = createAppAsyncThunk(
-  `${sliceName}/deleteAllTags`,
-  async (ids: Array<TagEntity['id']>) => {
-    const id = await send('tags-delete-all', ids);
-    return id;
-  },
-);
-
-export const updateTag = createAppAsyncThunk(
-  `${sliceName}/updateTag`,
-  async (tag: TagEntity) => {
-    const id = await send('tags-update', tag);
-    return id;
-  },
-);
-
-export const findTags = createAppAsyncThunk(
-  `${sliceName}/findTags`,
-  async () => {
-    const tags: TagEntity[] = await send('tags-find');
-    return tags;
-  },
-);
-
-export const { name, reducer, getInitialState } = tagSlice;
-
-export const actions = {
-  ...tagSlice.actions,
-  getTags,
-  reloadTags,
-  createTag,
-  deleteTag,
-  deleteAllTags,
-  updateTag,
-  findTags,
-};
-
-export const { markTagsDirty } = tagSlice.actions;
-
-function _loadTags(state: TagsState, tags: TagsState['tags']) {
-  state.tags = tags;
-  state.isTagsLoading = false;
-  state.isTagsLoaded = true;
-  state.isTagsDirty = false;
-}
-
-function _markTagsDirty(state: TagsState) {
-  state.isTagsDirty = true;
-}
diff --git a/packages/loot-core/src/server/tags/app.ts b/packages/loot-core/src/server/tags/app.ts
index 17b6e86c9e..7e30a278e3 100644
--- a/packages/loot-core/src/server/tags/app.ts
+++ b/packages/loot-core/src/server/tags/app.ts
@@ -11,7 +11,7 @@ export type TagsHandlers = {
   'tags-delete': typeof deleteTag;
   'tags-delete-all': typeof deleteAllTags;
   'tags-update': typeof updateTag;
-  'tags-find': typeof findTags;
+  'tags-discover': typeof discoverTags;
 };
 
 export const app = createApp<TagsHandlers>();
@@ -20,7 +20,7 @@ app.method('tags-create', mutator(undoable(createTag)));
 app.method('tags-delete', mutator(undoable(deleteTag)));
 app.method('tags-delete-all', mutator(deleteAllTags));
 app.method('tags-update', mutator(undoable(updateTag)));
-app.method('tags-find', mutator(findTags));
+app.method('tags-discover', mutator(discoverTags));
 
 async function getTags(): Promise<TagEntity[]> {
   return await db.getTags();
@@ -77,7 +77,7 @@ async function updateTag(
   return tag;
 }
 
-async function findTags(): Promise<TagEntity[]> {
+async function discoverTags(): Promise<TagEntity[]> {
   const taggedNotes = await db.findTags();
 
   const tags = await getTags();
diff --git a/upcoming-release-notes/6941.md b/upcoming-release-notes/6941.md
new file mode 100644
index 0000000000..561cd8d73c
--- /dev/null
+++ b/upcoming-release-notes/6941.md
@@ -0,0 +1,6 @@
+---
+category: Enhancements
+authors: [joel-jeremy]
+---
+
+Migrate tag management from Redux to React Query for improved state handling and performance.