Displaying items by tag: capital gains

Capital gains taxes vary based on a lot of factors. Those dwelling in California for example may pay up to capital gains like regular income for their state taxes, which can be brutal. However, variation in income and holding duration play a large part in the total expected payments for cap gains. Finally, medicare surtaxes for those couples with over a quarter of a million in income will face additional capital gains taxes. Investors should take early precautions at the beginning of 2022 to consider how to mitigate their tax bill for the upcoming year with tax-loss harvesting. Realizing certain losses in the middle of turmoil can minimize your final tax burden.


Finsum: There are great advantages in tax-loss harvesting that you can take advantage of in crypto still, and now might be a perfect time.

Published in Wealth Management
Monday, 24 January 2022 09:40

Tax Loss Harvesting Must Pay Attention to Crypto

Advisors need to make sure their clients are paying heed to their crypto returns as they focus on tax loss harvesting. In the past, many investors “flew under the radar” with their crypto returns, but the IRS is now focused on the issue. Some clients may have major gains that they need to report. The IRS considers crypto to be property, which means investor have to pay taxes on their profits.


FINSUM: Despite how the market looks now, stocks had a great year in 2021, and combined with some potentially big crypto wins, there is a lot of capital gains to offset with tax loss harvesting.

Published in Wealth Management
Tuesday, 28 December 2021 22:10

Last-Minute Tips for Cutting Your Tax Loss

The deadline is approaching for many investors to capitalize on tax strategies to minimize their bills moving forward. The most important thing investors can do is capitalize before the end of the year and claim losses they have. Special deductions are given to those with losers outpacing winners, up to $3000. However, investors should be wary of wash rules that may penalize them for repurchases within a 30-day period. The other most important strategy is to actually pay off excess medical expenses. Special provisions will mitigate your tax losses if they reach a certain portion of your income. Deferring income could also be a way out but it could be a risky strategy because next year could be even better than 2021.


FINSUM: Now is the time to capitalize on bond market blues and sell off those useless-yieldless tickets to save on the tax bill.

Published in Wealth Management
Wednesday, 22 December 2021 19:04

Tax Loss Harvesting to Reduce Your Burden

Crypto went on a wild ride this year as regulators from the globe sent the price in terms of dollars on a rollercoaster. However, some individuals might need to minimize their tax burden and crypto could provide some outs. If not all of your coins took off or better yet if you jumped in on Doge coin at the wrong time now is the time to sell off some coin and realize the gain for some optimal tax loss harvesting. Investors can also take advantage of the fact that wash rules don’t apply to Crypto until 2023, which means you can buy and sell your coins within a 30 day period to help minimize your tax contribution. Finally, investors can utilize a donation of cryptos above their fair market value to write off a charitable donation from your final tax bill.


FINSUM: Cryptos up and down roller coaster ride gives investors holding it an advantage in tax loss harvesting, and particularly when it comes to capitalizing on the Wash rules applicability.

Published in Wealth Management

The roaring post comeback of equities post pandemic has been wonderful but investors have few places to turn to mitigate their tax bill, except for the bond market. All major categories in the S&P 500 were up this year, and enjoying the broader rally. Bonds have suffered and so have many bond ETFs however, the glimmer of hope is how they can contribute to help offset tax loss. Bond ETF holders will already be in a better position just given their construction and exposure to taxes, and investors are also jumping between fixed income ETFs to manage fees as some ETF managers are cutting in order to synchronize for the tax loss harvesters. However, the 2-3% fall off in bond ETFs won’t be enough to entirely offset the equities rally this year.


FINSUM: This is the perfect time to capture low fees in bond ETFs because they are mainly a tax vehicle at this moment and return is secondary.

Published in Wealth Management
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