Income Tax Service
5200 W Market St
Greensboro, NC 27409
You’ve probably made life-changing gains as the cryptocurrency and stock markets exploded higher in 2017.
Unfortunately, when you make money, the taxman wants his cut as well. But there are a couple of things you can do to lower your tax bill.
One of the easiest and quickest ways to do this is through a strategy called "tax-loss harvesting". Every investor should consider selling their losses.
Selling losers and holding onto winners should be part of your overall wealth-building strategy. Selling (or “harvesting”) these losses has the potential to save you thousands of dollars come April 15. And that can go a long way towards building your nest egg.
If you are an active investor, you’ve probably already booked a few realized gains. But if you’re holding onto some losers as well, you can use them to offset the tax liability on your gains.
Today, I’ll show you four simple steps you can take to “harvest” your losses. (And the best part is that it takes less than an hour to do so).
Here’s an example... Let’s say you made $10,000 in your trading account this year. You could owe up to $3,960 in taxes. To cut that down, look at your open positions. Specifically, look at your losers. Why are you hanging onto those losers anyway? Now, let’s say you have a position showing a $5,000 loss. You can book that loss now and it would eliminate half of the $3,960 tax bill from your gains. That’s a potential $1,980 going back into your pocket.
How to Harvest Those Losses
(You must do this before or on December 31, 2017)
To figure out if you have any losses to harvest, follow these steps (they should take less than an hour):
Tthe tax code is very complicated. If you’re still uncertain about your taxes, you should consult your qualified ElectroFile Income Tax preparer.
The thousands you can save make your tax preparer's fees worth the expense.