Introduction

Do you want to sell some of your investments right now? You better be careful. Sales trigger taxes. You can avoid paying too much to Uncle Sam being aware of these 5 facts.

Capital Gains

The capital gains are increasing, even for the wealthy 1%. Did you know the tax rates on profits jumped at least 10% in the last few years? You are going to pay more in taxes when you make between $250,000-450,000. It does not matter whether you are single or married. You need to figure out the hit before the hit happens. You can save a lot by taking more deductions when you are not making as much. That way you can avoid tax debt.

Short-term Sales

The short-term sales are going to hit you where it hurt the most, the wallet. Do you want to sell something you have had for a year or so? You are going to pay more if your tax bracket is in the top 3 percent. Your Medicare surcharge is increasing to 4%. Hold onto the winners as long as you can.

401(k)

Did you know that your 401(k) money is taxed as normal income tax rates? You are taxed only on the money you pay into the plan. The best thing to do is roll the money into an IRA account. That way you save money on the taxes you pay.

Taxable Accounts

Do you have any taxable accounts? The people who get the money when you die do not have to pay an appreciation tax. However, that step occurs if they decide to sell. You should watch how you liquidate your accounts. You can use the taxable accounts to sell something with a loss or a modest gain. You should leave your securities with the largest gains alone. You take the remaining money from the tax-deferred accounts. That is one way to do it.

Charities

Did you know that charities love your stocks? They prefer that instead of cash. You can sell one if you have had it for more than a year. They get the money without paying the taxes. You should figure out which shares are worth the most and give them as charitable gifts. The non-profit organizations are going to love you.

Conclusion

You can lose a lot more than your shirt if you do not know how tax deductions work with your investments. Learn what you can so you can get the most out of your money. Your money. Your responsibility.

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