Year-End Tax Planning: Part 2

Sandy Botkin
Follow Me
Latest posts by Sandy Botkin (see all)

If you hold property or stocks more than a year, you can get long term capital gains. These gains can be taxed as low as zero percent (for taxable incomes up to $77,200 married or $38,600 single) up to 23.8% depending on your income. If you have gains, consider selling some of your stocks or bonds that produce a loss. Also, considering giving some appreciated property to relatives in very low brackets in order to support them. If they sell these assets,, they potentially can pay tax at much lower levels than you such as if they qualify for the 0 percent tax on gain.

Postpone income until 2022 yet accelerate deduction into 2021. This is particularly good if you expect lower income next year.

Consider the possibility and implications of converting a traditional IRA to a Roth IRA. Although this conversion would be taxable, the income earned from the Roth could be tax free forever if you keep it at least 5 years. Even better, there are no required minimum distributions from a Roth after age 70. You also don’t need to convert the whole IRA. You can do it with some of your IRA funds if you wish.

Originally written in October 2018.

All content on this site is the property of Midas IQ LLC, or the author. You may link to any article that you wish, or share via the social media buttons below. However, please do not copy articles or images for use on other sites without express written permission.