Managing Tax Issues
Moderator: Aitrus
- MakeMe$$$$
- Posts: 772
- Joined: Tue Aug 23, 2011 10:12 pm
Managing Tax Issues
In the past, my rather small investments didn't create a huge tax issue. I was able to manage tax payments through additional payroll taxes.
I'm starting to have a more significant amount of money invested. It isn't a crazy amount of cash in the market but enough that by the end of CY 18 I could see (I HOPE ) a larger tax bill then I've had in the past.
I'm not opposed to continuing my past practice of additional payroll deductions. I suppose I could use quarterly methods too.
Anyway...your thoughts/suggestions?
I'm starting to have a more significant amount of money invested. It isn't a crazy amount of cash in the market but enough that by the end of CY 18 I could see (I HOPE ) a larger tax bill then I've had in the past.
I'm not opposed to continuing my past practice of additional payroll deductions. I suppose I could use quarterly methods too.
Anyway...your thoughts/suggestions?
Don
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
- Snapdragon
- Posts: 247
- Joined: Tue Jan 29, 2013 5:26 pm
Re: Managing Tax Issues
I'm curious to suggestions also, other than selling losing stock.
Re: Managing Tax Issues
Just don't sell anything. No capital gains.
Owner/creator of TSPcalc.com - "Know your numbers"
-
- Posts: 353
- Joined: Mon Jul 02, 2012 1:38 pm
Re: Managing Tax Issues
Take a look at the Mad Fientist's take on Tax-Loss Harvesting
https://www.madfientist.com/tax-loss-harvesting/
and more fun with Tax-Gain Harvesting
https://www.madfientist.com/tax-gain-harvesting/
https://www.madfientist.com/tax-loss-harvesting/
and more fun with Tax-Gain Harvesting
https://www.madfientist.com/tax-gain-harvesting/
mo meng, mo ching (which loosely means: no money, no life)
-
- Posts: 4330
- Joined: Tue Aug 19, 2008 8:51 pm
Re: Managing Tax Issues
I have described myself to both Fidwlirt and Merrill Lynch as a Daily Trader. One completed trade, thousand shares, bought and sold. That generates capital gains. Wish I had enough capital gains to pay off the national debt. But here's the sweet spot: every night I try to be in cash. That would make settling my estate easier for my wife. So, whatever the capital gains taxes are, I pay. And the rest is mine. In cash.
This does not mean you cannot own stock for a longer period of time. Just remember to follow the share price charts. They tell you when to sell and when to buy. Remember that nobody gets hurt taking a profit. Hire a tax accountant to do your capital gains tax calculations. The cost is tax deductible.
How is the motorhome?
This does not mean you cannot own stock for a longer period of time. Just remember to follow the share price charts. They tell you when to sell and when to buy. Remember that nobody gets hurt taking a profit. Hire a tax accountant to do your capital gains tax calculations. The cost is tax deductible.
How is the motorhome?
- MakeMe$$$$
- Posts: 772
- Joined: Tue Aug 23, 2011 10:12 pm
Re: Managing Tax Issues
At this time I am not even close to a daily trader. But...for simplicity sake I'm kinda like you on the gains will be what they are and tax will be what it is. I do see some good info on the harvesting losses as being practical.crondanet5 wrote:I have described myself to both Fidwlirt and Merrill Lynch as a Daily Trader. One completed trade, thousand shares, bought and sold. That generates capital gains. Wish I had enough capital gains to pay off the national debt. But here's the sweet spot: every night I try to be in cash. That would make settling my estate easier for my wife. So, whatever the capital gains taxes are, I pay. And the rest is mine. In cash.
This does not mean you cannot own stock for a longer period of time. Just remember to follow the share price charts. They tell you when to sell and when to buy. Remember that nobody gets hurt taking a profit. Hire a tax accountant to do your capital gains tax calculations. The cost is tax deductible.
How is the motorhome?
The coach is doing great. We just settled into Yuma, AZ for the winter. More time to concentrate on my strategies.
Don
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
Re: Managing Tax Issues
Aren't short term capital gains taxed as ordinary income? https://www.investopedia.com/articles/p ... -rates.asp
Income from Municipal Bonds doesn't have any federal tax impact (States income tax rules vary on Muni's)
You can increase your withholding on your pay, retirement or Social Security check(s). I need to figure my taxes by end of year to see whether or not I need to submit payment for this year to avoid penalty. You can avoid the penalty as long as you don't owe more than $1,000 or certain percentages of current/prior year taxes, whichever is lower https://www.irs.gov/taxtopics/tc306
Income from Municipal Bonds doesn't have any federal tax impact (States income tax rules vary on Muni's)
You can increase your withholding on your pay, retirement or Social Security check(s). I need to figure my taxes by end of year to see whether or not I need to submit payment for this year to avoid penalty. You can avoid the penalty as long as you don't owe more than $1,000 or certain percentages of current/prior year taxes, whichever is lower https://www.irs.gov/taxtopics/tc306
- MakeMe$$$$
- Posts: 772
- Joined: Tue Aug 23, 2011 10:12 pm
Re: Managing Tax Issues
I use "Sector Surfer" http://www.sumgrowth.com/default.aspx to manage my Fidelity holdings. For the vast majority of strategies holdings don't reach "long term" status for the lower tax rate. As you suggest, in the past I've just increased my payroll/retirement withholdings to cover those taxes. Currently one of my major holdings is a municipal bonds fund so I'm familiar with that tax advantage.evilanne wrote:Aren't short term capital gains taxed as ordinary income? https://www.investopedia.com/articles/p ... -rates.asp
Income from Municipal Bonds doesn't have any federal tax impact (States income tax rules vary on Muni's)
You can increase your withholding on your pay, retirement or Social Security check(s). I need to figure my taxes by end of year to see whether or not I need to submit payment for this year to avoid penalty. You can avoid the penalty as long as you don't owe more than $1,000 or certain percentages of current/prior year taxes, whichever is lower https://www.irs.gov/taxtopics/tc306
Now that I have a steady flow of funds being added to my investments I do expect to see some situations where I can "harvest losses" but that remains to be seen. OTOH...if my strategies do a good job...short term taxes...here I come. LOL
Currently we are SD residents so there is not state income tax on any of my earnings. That could change in 4-5 years but I will start a new thread on that subject.
Don
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
-
- Posts: 353
- Joined: Mon Jul 02, 2012 1:38 pm
Re: Managing Tax Issues
The Tax System is complex because it's social engineering, it is designed to manipulate the behavior of select groups in the population.
Investors holding a stock longer stabilizes the stock market, so the System offers those investors a premium with lower taxes for long-term capital gains. Same idea for qualified dividends: hold a dividend paying stock for more than 60 days and your benefit is the lower capital gains tax rate.
It is interesting that if you can reduce your AGI (Adjusted Gross Income) into the 15% tax bracket that the long term capital gains tax rate = 0%, no tax owed on selling stock/ETF held for more than a year and no tax on qualified dividends received that year.
Never change your investment plan to fit the tax code but knowledge of the tax code can improve decisions when selecting a plan.
Investors holding a stock longer stabilizes the stock market, so the System offers those investors a premium with lower taxes for long-term capital gains. Same idea for qualified dividends: hold a dividend paying stock for more than 60 days and your benefit is the lower capital gains tax rate.
It is interesting that if you can reduce your AGI (Adjusted Gross Income) into the 15% tax bracket that the long term capital gains tax rate = 0%, no tax owed on selling stock/ETF held for more than a year and no tax on qualified dividends received that year.
Never change your investment plan to fit the tax code but knowledge of the tax code can improve decisions when selecting a plan.
mo meng, mo ching (which loosely means: no money, no life)
Re: Managing Tax Issues
Does your broker offer advisory or financial planning services? I've never used these but it might be worth looking into.
David Tepper - "There is a time to make money and a time to not lose money."
Warren Buffett - "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Warren Buffett - "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Fund Prices2024-03-28
Fund | Price | Day | YTD |
G | $18.15 | 0.05% | 1.05% |
F | $19.08 | -0.06% | -0.74% |
C | $82.21 | 0.11% | 10.55% |
S | $82.43 | 0.30% | 6.92% |
I | $42.57 | -0.24% | 5.95% |
L2065 | $16.38 | 0.02% | 8.37% |
L2060 | $16.39 | 0.02% | 8.38% |
L2055 | $16.39 | 0.02% | 8.38% |
L2050 | $32.73 | 0.01% | 6.95% |
L2045 | $14.91 | 0.02% | 6.58% |
L2040 | $54.38 | 0.02% | 6.22% |
L2035 | $14.34 | 0.02% | 5.79% |
L2030 | $47.67 | 0.02% | 5.38% |
L2025 | $13.15 | 0.03% | 3.43% |
Linc | $25.61 | 0.03% | 2.82% |