How to switch an LED using logic 0 and 1
Yes, there is a better way: A transistor. 

A transistor can be used to switch a strong signal (high LED current from +5V supply) with a weak signal (TXD output pin) without degeneration of the  weak signal. 

You could use a MOSFET, but they often have high gate capacitance which burdens/degrades the TX signal. It would be better to use a bipolar transistor, but there you need an additional bias resistor for the base.