As we head into summer, the outlook for taxes remains cloudy.
Strategy: Rely on what you know for sure. Cope with any change later.
Here are 10 midyear tax moves that can’t miss under the existing tax rules.
1. Harvest capital losses. Don’t wait until year-end to assess your tax situation. If you realized capital gains earlier this year, you can sell securities this summer at a loss to offset those gains, plus up to $3,000 of ordinary income. Otherwise, the maximum federal income tax rate on short-term gains is 39.6% or 20% on long-term gains and you may owe the 3.8% Medicare surtax on net investment income, too. Plus, you might owe state income tax.
2. Max out on long-term gains. The maximum federal income tax rate on long-term capital gains is only 15% or 20% for those in the top ordinary income tax bracket. Even better, if you expect this to be a low income year due to a business loss or some other reason, a portion of yo...(register to read more)