Did you profit from selling a house, some investments, or even a car this year? If so, you’ll likely need to report the sale on your income tax return due to the long-term capital gains tax. Fortunately, if your sale qualifies as a long-term capital gain, the taxes are less than...
If you sold an asset for less than you bought it, that’s known as a capital loss. The IRS doesn’t tax you on losses and you may be able to reduce your taxable income with capital losses.Short-term vs. long-term capital gains...
Other studies adopt the more traditional view that the capital gains tax raises the effective tax burden on capital income. This paper uses capital gain realization data from the 1982 IRS Individual Tax Model in an effort to distinguish between these views. It shows that for about one-fifth of...
This paper uses capital gain realization data from individual tax returns to evaluate recent claims that sophisticated portfolio strategies permit investors to avoid capital gains taxes. The results suggest important investor heterogeneity. Twenty percent of taxpayers with capital gains or losses face bindin...
Selling immediately means you pay ordinary income tax, while selling later means you pay a lower long-termcapital gains tax, which reducesyour tax burden. If you're considering this strategy, make sure you have enough cash to contribute and that the investment fits your overall financial plan....
Tax-loss harvesting is valuable only in taxable accounts, not special tax-advantaged accounts such as IRAs and 401(k)s, where capital gains aren’t taxed annually (or sometimes at all, in the case of the Roth IRA.) And if you’re looking to reduce your tax bill, you have a number ...
Taxes shouldn't be the primary driver of your investment strategy—but it makes sense to take advantage of opportunities to manage, defer, and reduce taxes. Manage federal income taxes by considering how capital gains and losses are recognized in your portfolio. Using tax-deferred accounts when ...
Participation in medical, dental, and dependent care plans may also reduce your tax burden. In some cases, depending on how the company structures its benefits, even certain expenses may be deducted from your pay and reduce your taxable income. Why did less tax come out of your paychec...
Capital losses can be rolled forward to subsequent years to reduce any income in the future and lower the taxpayer's tax burden.2 3. Use Tax-Advantaged Retirement Plans Among the many reasons to participate in a retirement plan like a401(k)or anindividual retirement account (IRA)is that you...
Capital gains exposure is an assessment of the overall tax impact of gains and losses from the sale of assets in a stock fund or other similar investment fund. This may have tax implications for investors in the fund. Positive capital gains exposure means that the fund has appreciated, and t...