Year-End Tax Tips For Investments
Year-End Tax Tips For Investments
By Glenn Dahlke
Yes, its that time of year again, time for every financial column to drum into your head all the year-end investing tax tips. It’s the equivalent of your list to Santa. You either take care of it by year-end or you take your chances. Consider yourself warned.
Take Your Losses – Losses are never a thing of beauty, but they can become palatable at this time of year. Even if you’re convinced that the paper loss is only a temporary situation, you should still consider selling. You can buy the position back in 31 days to avoid what’s called a “wash sale.”
Netted out against long-term capital gains, you can claim $3,000 of long-term capital losses on your current income tax return, with the remainder being carried forward into future years.
Check With Your Mutual Funds for Long Term Capital Gain Distributions – Many Mutual Funds make long-term capital gain distributions before the end of the year. Even if you reinvest them back into the mutual fund, they are still taxable distributions. By calling the mutual fund company (or your broker), you should be able to get at least an estimate of what those distributions will be.
If there are distributions, go back and read the tip about losses.
Defer Capital Gains – If you can defer taking your capital gains until January, do it. If you take them today, the tax will be due April 15th, 2009. If you wait until January, the tax won’t be due until April 15th, 2010. You decide.
Maximize Your 401(k) Contribution – You know this was a New Year’s Resolution last year! December 31st is the final day to make good on it.
Fulfill Charitable Pledges With Low Tax-Basis Stock – Why give cash when you can siphon off some of that ExxonMobil you’ve owned for 20 years? You can claim a deduction for its full value – not simply what you paid for it – and avoid the capital gains tax as well.
Of course if you’re thinking about giving away stock with a tax basis higher than its current market value, think again. Here, you’re better off selling the stock, taking the loss, then giving away the cash.
If 70 ½ Or Older Make Sure You’ve Made The Required Minimum Distribution From Your IRA – Distributions from Individual Retirement Accounts (IRAs) must be made by year end. Make sure you’ve included all your accounts in calculating your minimum distribution. Mistakes can often occur if you transferred IRA accounts during the year.
Remember That The End of One Year Is The Beginning of A New Year – Tax planning and investing are year-round activities. As you move into the new year, make a list of things to do early in the year. Increase your 401(k) contribution or start a systematic investment program. Leaving it all to the end of the year can put a dent in both your cash flow and your holiday cheer.
Glenn (“Chip”) Dahlke, a senior contributor to the Living Trust Network, has 29 years in the investment business.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more interviews and updates.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
This transcript was generated by software and may not accurately reflect exactly what was said.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more.
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. I’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
IRS Has Handed Out More Than $100 Billion in Refunds so far
As with every tax season there have been some mistakes that have caused problems for some taxpayers, as well as the usual battle with tax scams that pop up every year. However for the most part, the refund process has gone well to this point. In fact, at the end of February, the IRS reported…
There Is a Bright Side for Early Filers Victimized by Obamacare Gaffe
There’s been no shortage of complaints and problems with Obamacare since the nations new health care coverage law went into effect. In fact, the debate continues to rage on and another major decision from the U.S. Supreme Court is forthcoming in the months ahead. However, for the time being, Obamacare has been a problem for…
Should You Pay Estimated Taxes?
For most people tax time only comes once year. However, for anyone who has to pay estimated taxes a large tax bill could be due several times a year. Again, most people do not have to worry about paying estimated taxes, but there are several circumstances that will put you in that category. The most…
Do not Be the Victim of a Tax Scam
As the tax season continues to be in full swing we here at GROCO continue to hear of more and more tax scams making the rounds. We’ve discussed tax scams before, but it never hurts to repeat this important information, especially at this time of year when tax scammers are so prevalent. In fact, several…