Moves to Make When Tax Rates May Be Going Up – Year-End Tax Tips

Moves to Make When Tax Rates May Be Going Up – Year-End Tax Tips

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I know you’ve been thinking in how you can invest in real estate or stocks if you really don’t have extra money to do it. Or maybe you’re thinking that creating your investment portfolio will require loads of money. You might be thinking also, that accumulating enough money to start your investment portfolio you will have to work extra hours or find a part-time job. The true is that really you don’t have to find extra money or extra job hours or any part-time job. What you need to do is understand that there are creative, innovative and legal ways to find that money and that many of these ways are just around you at your hand.

Given this, it may make sense to sell more of the high gaining stocks now, if you were planning on selling them over the next year anyway. Certainly, if any of the following reasons are true you may want to sell your gainers now instead of later: 1) You intended to take some money out of the stock market in the near future. 2) You don’t like the future prospects of the stock. 3) You need to re-allocate your portfolio. 4) You have a large gain, you’re neutral on the prospects of the stock, and you have enough losses on other stocks to offset the gains now.

While being able to pay your debt through settlement will appear as if you’ve actually saved quite a surmountable amount, the reason why many still insist that you pay all of your debts if possible is because of the ramifications that it can bring later on and one of them is the 1099-C.

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Delaying a capital gain for a number of years could make the net investment worth more by enough down the road to justify paying the higher capital gains rate then. In other words, even if the gain is taxed at a higher rate then, the compounded gain on the stock and 20% of the earnings (what would have been taxed away) will likely earn more than the difference in the capital gains tax rate.

We lowered our tax burden and we feel good knowing that we are helping those suffering from the Aids epidemic in the Sub-Saharan region of Africa by sending much- needed pharmaceuticals.

Secondly it puts you on the bad side of the IRS, especially if you are unable to realize its importance and forget to file it with your tax returns, thereby opening you up to possibilities of audits, penalties and fines in the future.

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And so the overall point would be to shift inevitable realized overall gains to this year, and losses to next year.

Of course, none of this advice trumps standard investment considerations. You should buy stocks you believe will go up and sell those you think will go down. But for those subject to the above conditions, these rules may leave more money in your pocket.

Harris Smith runs the home equity line of credit website. Don’t Miss Out!

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