Tax Strategies Scan: Trimming Taxes on Investments
Published: 10/8/2015 12:19:44 PM
Our weekly roundup of tax-related investment strategies you may be thinking about.
5 ways to trim your client's taxes on investments: A "high-cost, long-term" tax-reporting methodology is an option that clients can use to reduce their taxes on investment income, according to this article on NerdWallet. Tax-loss harvesting is another strategy to save on taxes, while putting assets with the biggest growth potential in Roth and taxable accounts is a smart move. Investors also need to keep actively managed funds away from their taxable accounts and opt for exchange-traded funds, which are more tax-efficient than mutual funds. -- NerdWallet
Finding ways to provide better overall after-tax gains: Tax-loss harvesting -- a strategy that uses losses from the sale of stocks to offset capital gains -- can be a good way for clients to avoid or defer taxable investment income, according to CNBC. However, it could mean a missed opportunity once the sold stocks recover, and "wash-sale" rules prevent investors from buying the same stocks back within 30 days. As the rules that apply to tax-loss harvesting can be complicated, read tips in this story on how to implement the strategy properly without violating tax rules. -- CNBC
Do you qualify for zero capital gains taxes? Clients may pay little or zero capital gains taxes if they use their losses from the sale of dwindling securities to offset these gains, subsequently reducing their tax bill, according to the Huffington Post. To do this, they need to understand how the capital gains tax is treated, what tax rates apply and how they net gains and losses. Also, clients need to know how to deduct the losses and determine the special tax rates for home sales. -- Huffington Post
6 money tips for new parents: Has your client just welcomed a firstborn into the family? Then they should take advantage of tax benefits that can reduce their tax bill, such as an additional $4,000 deduction from taxable income and $1,000 that comes with the Child Tax Credit, according to TheStreet. Couples can also claim a tax credit equivalent up to 35 percent of $3,000 in qualifying day care and day camp expenses per child. -- TheStreet
Contact us today and let us help you reduce your tax liabilities!