Displaying items by tag: taxes

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.

Macro factors are flummoxing the bond market and a combination of rising inflation and higher interest rate forecasts are crushing bottom lines. However, now is a great time to consider the future tax bill. Rarely can investors see the future, but the Fed is being about as explicit as possible about hiking rates multiple times this year. This means as yields creep up, bond prices will fall in various segments of the bond market. This is an opportune time to consider cutting ties with bonds and realizing the losses you have because it will be over a month before investors will want to jump back in and they can harvest the losses for the end of the year. FINSUM: Most investors have been looking to active funds and shorter duration to minimize inflation risk, but tax-loss harvesting is a nice way to take advantage of rising yields.

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.

Joe Manchin, Democratic Senator from West Virginia, made a splash last week when he pulled his support for the build back better citing a number of problems that keep him from backing the bill. However, this week Manchin did a 180 on the billionaire tax saying he would be willing to support it in a revised version of the bill. Manchin’s version of the bill includes many of the same spending appropriations such as pre-k care, climate change, and Obamacare, but omitted certain pieces like the child tax credit. Manchin’s vote is critical if Biden hopes to pass the bill, but with rising inflation, labor shortages, and spiking national debt, he’s still reluctant to throw his weight behind Biden’s bill.

FINSUM: Remember the House’s version of the bill didn’t include a billionaire tax, even if Manchin puts it back on the table it’s unlikely the final bill will include it.

Biden’s latest $2 trillion stimulus/economic reform bill is stuck in congressional limbo, and that's because not even all Dems are on board. Speaking on behalf of moderates Joe Manchin, Democratic Senator of West Virginia listed an array of suggestions to Biden in order for there to be bi-partisan support. Some of Manchin’s suggestions included means testing and work requirements for expanded child tax credits in order to stop wealthier individuals from taking advantage of the program. Other democratic senator’s ae calling for a smaller corporate tax hike and lower income taxes on weather individuals. Manchin accused staff of adding in provisions that are limiting bi-partisan support, and even having a hard time garnering support in their own party.

FINSUM: The lofty aims of Biden’s original economic reform were a pipe dream, major changes will have to come if they want to have a chance of passing the bill.