Submitted by Pat Cote on December 7, 2018
If you went back to school in 2018 or recently started a business and are incurring start-up losses, your income might be unusually low in 2018. If so, the tax strategies to address by December 31 are likely quite different than a typical income year: in particular, you should consider realizing unrealized capital gains or converting tax-deferred IRAs to Roth IRAs.
Both of these strategies aim to take advantage of the lower marginal income tax rates at lower incomes. For example, the following tax rates apply in 2018 if your taxable income is $77,400 if married filing jointly or $38,700 if single:
- 12% Federal income tax
- 0% Long-term capital gains tax