Tax strategies for individual investments and planning1. 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?
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