Submitted by Susan Powers on November 11, 2018
Looking for tips to help you save money on your tax bill for 2018? Smart tax planning starts now rather than waiting until next year when it’s often too late. Here are 5 tips to help you take full advantage of tax reform.
1. Review your investments, ‘harvest’ losses
Given recent market volatility, you may have losses in your taxable accounts. You can lock in those losses for tax purposes, while still being invested for the long-term by buying something similar, but not identical. You can use these tax losses to offset capital gains when you file your tax returns. This is a concept known as tax-loss harvesting. For example, if you sold one investment and realized a gain of $5,000 and then sold another at a loss of $4,000, you reduce your taxable gain to $1,000. If your loss is larger than the gain, you can deduct up to $3,000 of the net loss against ordinary income.