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The tax consequences of selling mutual funds
July 15, 2024
Categories: Investments, Mutual Funds
Do you invest in mutual funds or are you interested in putting some money into them? If so, you’re part of a large group. According to the Investment Company Institute, 116 million individual U.S. investors owned mutual funds in 2023. But despite their widespread use, the tax rules involved in selling mutual fund shares can be complex. Review the basic rules Let’s say you sell appreciated mutual fund shares that you’ve owned for more than one year. The resulting profit will
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IRAs: Build a tax-favored retirement nest egg
January 30, 2024
Categories: #hh, Investments, IRA, Retirement, Roth, Secure2.0
Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t changed is that they can help you save for retirement on a tax-favored basis. Here’s an overview of the basic rules and some of the recent changes. Rules for traditional IRAs You can make an annual deductible contribution
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Investment swings: What’s the tax impact?
September 12, 2023
Categories: 401(k), Capital Loss, Investments, IRA, NIIT, Roth
Investment swings: What’s the tax impact? If your investments have fluctuated wildly this year, you may have already recognized some significant gains and losses. But nothing is decided tax-wise until year end when the final results of your trades will reveal your 2023 tax situation. Here’s what you need to know to avoid tax surprises. Tax-favored retirement accounts and taxable accounts If you’ve had wild swings in the value of investments held in a tax-favored 401(k),
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Year-end giving to charity or loved ones
November 22, 2022
Categories: #hh, General, Investments, Tax
The holiday season is here and many people plan to donate to their favorite charities or give money or assets to their loved ones before the end of the year. Here are the basic tax rules involved in these transactions. Donating to charity In 2022, in order to receive a charitable donation write-off, you must itemize deductions on your tax return. What if you want to give gifts of investments to your favorite charities? There are a couple of points to keep in mind. First, don’t give
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Tax and other financial consequences of tax-free bonds
October 11, 2022
Categories: #hh, Business, Investments, Retirement, Tax, Tax Free
If you’re interested in investing in tax-free municipal bonds, you may wonder if they’re really free of taxes. While the investment generally provides tax-free interest on the federal (and possibly state) level, there may be tax consequences. Here’s how the rules work. Purchasing a bond If you buy a tax-exempt bond for its face amount, either on the initial offering or in the market, there are no immediate tax consequences. If you buy such a bond between interest payment
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Is your income high enough to owe two extra taxes?
September 7, 2022
Categories: #hh, General, Income, Investments, Tax
High-income taxpayers face two special taxes — a 3.8% net investment income tax (NIIT) and a 0.9% additional Medicare tax on wage and self-employment income. Here’s an overview of the taxes and what they may mean for you. 3.8% NIIT This tax applies, in addition to income tax, on your net investment income. The NIIT only affects taxpayers with adjusted gross income (AGI) exceeding $250,000 for joint filers, $200,000 for single taxpayers and heads of household, and $125,000 for married
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The kiddie tax: Does it affect your family?
July 19, 2022
Categories: Income, Investments, Savings, Tax
Many people wonder how they can save taxes by transferring assets into their children’s names. This tax strategy is called income shifting. It seeks to take income out of your higher tax bracket and place it in the lower tax brackets of your children. While some tax savings are available through this approach, the “kiddie tax” rules impose substantial limitations if: The child hasn’t reached age 18 before the close of the tax year, or The child’s earned income