Tax strategies for individual investments and planning

Reference no: EM1365078

1. Generally, tax strategies operate in two time frames - now and later. " Now" refers to the twelve months of the current tax year. "Later" refers to the long-range tax strategies that benefit taxpayer future. This includes maximizing the tax-deferred savings offered by a qualified retirement plan, such as a 401(k). One strategy people use is shifting income to other family members ( like the children) to lower taxpayer income tax. Just need to watch out for the "kiddie tax".

How about "charging" expenses at year-end?

2. Although tax considerations should not drive investment decisions, it makes sense to get most tax advantage out of selling a stock or mutual fund. The biggest tax benefit is maximum allowable $3,000 in net capital losses each year to deduct against ordinary income, which is taxed at taxpayer marginal tax bracket. What about 401(k) contribution?

Reference no: EM1365078

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