1. Alright, here is a quick thread on how I just saved a client $5,040 on her taxes this year.
Pay attention, because this is the stuff your tax and financial advisors should be looking out for, and if they're not, they gotta go.
Pay attention, because this is the stuff your tax and financial advisors should be looking out for, and if they're not, they gotta go.
2. She has a ton of JP Morgan stock.
Too much, in fact, so she wants to sell some of it to move elsewhere.
She makes about $88,000 a year, and is married.
Her original plan was to sell 200 shares, and JP Morgan is about $167, and many of her shares were at a low or $0 basis.
Too much, in fact, so she wants to sell some of it to move elsewhere.
She makes about $88,000 a year, and is married.
Her original plan was to sell 200 shares, and JP Morgan is about $167, and many of her shares were at a low or $0 basis.
3. So almost all of the $33,400 she would receive would be profit.
Do you see the problem?
As long as she stays in the 12% tax bracket, she would pay ZERO federal capital gains tax.
But, the minute she goes over, she owes 15% on ALL her gain.
Do you see the problem?
As long as she stays in the 12% tax bracket, she would pay ZERO federal capital gains tax.
But, the minute she goes over, she owes 15% on ALL her gain.
4. Solution?
We simply had her sell 130 of the shares now to keep her in the proper (zero) tax bracket, and we can sell the remaining 70 shares on January 3rd, 2022, about 7 weeks from now.
So, she pays NO tax on the gains. (Well, except for CA taxes cause they're jerks)
We simply had her sell 130 of the shares now to keep her in the proper (zero) tax bracket, and we can sell the remaining 70 shares on January 3rd, 2022, about 7 weeks from now.
So, she pays NO tax on the gains. (Well, except for CA taxes cause they're jerks)
5. Even if you don't understand the exact math, keep in mind that this is what you need to watch out for to save money when your making financial moves.
Again: $33,400 in her pocket over the next 7 weeks, not one dime of federal tax.
/end
Again: $33,400 in her pocket over the next 7 weeks, not one dime of federal tax.
/end
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