With the uncertainty in the marketplace, now is a good time to review the rules surrounding investment losses. This knowledge can really help minimize your tax obligation next year. This is because investment gains and income can be subject to a variety of federal tax rates as high as 37%. This, plus the 3.8% net investment income tax, makes planning around when to take investment losses an important tax subject this year.
Know the meaningful rules
What makes investment losses such an important tax planning subject? Here are the relevant tax ramifications surrounding investment losses.
So given these rules, here are some tips.
Maximizing the impact of investment losses
Remember, investment losses can be used to offset investment gains and a limited amount of your ordinary income. Since the tax rates vary so greatly, proper planning to match losses against higher taxed items can make these losers a real winner on next year's tax return.
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