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5 Tax Tips for Investors TaxAct Blog

Details: If you lost money on the sale of your investment in 2020, you can use the capital losses to offset your capital gains. If your capital losses exceed your capital gains in 2020, you’re allowed to claim a capital loss deduction of up to $3,000 per year ($1,500 if married filing separately).

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What is Investment Spending and How to Plan It

Details: Debt free investment spending is the use of these funds to pay off some of your consumer debt. If you can pay off one of your credit card balances, then the amount you would normally send toward that card could now be redirected to the next credit card you want to pay off—thereby doubling (or tripling) up on your monthly minimum balances.

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How to Report Stock Sales on Your Tax Return TaxAct Blog

Details: Paying Taxes if You Buy or Sell Investments. If you sold some of your investments in 2020, you may need to pay taxes on any capital gains you had. Capital gains are basically the profits you earn from investments. The formula is simple: capital gains = selling price – purchase price. How much you will owe in taxes will depend on a few factors.

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How to Know When You're Ready to Invest

Details: Emergency Savings, high interest debt, investing, Investment Plan, Investments, Retirement, retirement plan, Retirement Savings, stock market. Related Articles. The Skinny on Freelancer Taxes. Read Article. 5 Reasons Not To Touch Your Retirement Funds. Read Article. 6 Steps to Minimizing Taxes on Retirement Income.

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What Are Capital Gains Taxes

Details: This rule was created in an effort to encourage long-term investment in the economy. If I have long-term capital gains, how much tax will I have to pay? The difference in income tax rates is substantial. In fact, if you are in a low- to moderate-income tax bracket

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Tax Implications Of Owning a Rental Property TaxAct Blog

Details: Likewise, if your investment is not “at risk,” meaning you cannot lose some or all of the money you have in it, you cannot take a tax loss of more than the amount you have at risk. You probably don’t need to worry about this rule unless you have a more complex financial investment.

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6 Steps to Minimize Retirement Income Taxes TaxAct Blog

Details: If you buy investment property, gold or other capital assets and hold them for more than one year, you pay a much lower tax rate on the gain than you would pay on ordinary income. If you’re in the 25 percent tax bracket, the capital gains tax rate is only 15 percent. If you’re in the 15 percent tax bracket, the capital gains rate is 0 percent.

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Tax Deductions Every Current and Future Retiree Should Know

Details: Investment Expenses. Income from investments is taxed at a lower rate than income earned from a job. That’s great for retirees hoping to live off of their wise investments. More good news: you can deduct most investment-related expenses, including fees for brokers, financial planners and lawyers.

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Advantages and Disadvantages of Buying Gold Coins as an

Details: Here are some advantages and disadvantages of buying gold coins as an investment: Advantages to buy gold coins. Gold and other hard metals have always been a time-honored part of traditional investment plans. Here’s why: Gold tends to go up when other investments decline, providing a stabilizing effect for your portfolio.

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How to Avoid Paying the Higher Tax

Details: This new tax applies to investment income, such as interest, dividends, capital gains, rental and royalty income. You pay it in addition to the tax you already pay on investment income. Add the 3.8% additional capital gains tax to the new 20% capital gains tax rate, and you pay a total of 23.8% tax on capital gains – almost 10% more than you

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Ways to Save for Retirement on Minimal Income

Details: This year, you will continue earning interest on the $107 in your account rather than just the initial $100 you invested. If you earn a 10 percent return this year on that $107, you’ll add $10.70 to your investment. Therefore, next year you’ll earn interest on $117.70. That increase just keeps snowballing. The best strategy, of course, is

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6 Money Saving Tips For Young Adults

Details: (The measure includes all of a plan’s investment and administrative costs.) In addition, a recent Brightscope ranking of the 30 best 401(k)s found total plan costs averaging just 0.28 percent. If you work for a small company, costs may be much higher. Brightscope says total costs in plans with $25 million or less in assets averaged 1.29

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Robo-advisors: Are They Legitimate

Details: Every investment dollar you lose to fees is a dollar that’s not growing for future you. Robo-advisors do come with higher fees than the DIY investor option of going directly to a brokerage firm. The fee is usually still lower than what you’d get with a dedicated planner though.

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When Is Interest Expense Tax Deductible

Details: Investment interest expenses, along with other miscellaneous itemized deductions, are subject to a “floor” before you can deduct them. That means there is a minimum amount you have to incur before you get the benefit of the deduction. Therefore, your total miscellaneous itemized deductions, including investment interest expense, is only

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How to Claim Crowdfunding Campaigns on Tax Return

Details: For example, if someone donates $100 to you and do not receive anything in return, the $100 is a non-taxable gift. However, if someone donates $100 to you and you give them a gift worth $20 in return, then your non-taxable gift is $80. If the donation is a gift, a gift tax may apply; however, the person responsible for the gift tax would be the

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3 Common Tax Mistakes That Parents Make TaxAct Blog

Details: However, they’re not the best answer for everyone. In fact, in recent years, some investment companies have been reprimanded for improperly recommending Section 529 plans that were not appropriate. Fees vary, as do state laws regarding tax advantages. Do your homework! • Don’t assume your financial situation will remain the same.

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How Long Should I Keep My Tax Return

Details: If you make a bad investment, you have the ability to file a claim for a loss from worthless securities. You can also file a claim for a bad debt deduction. In either event, you need to hold onto your records for seven years. That is how long the IRS is allowed to question you about that specific situation. Indefinitely

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Long Term Capital Gains Tax Rate: How Much Tax Will I Owe

Details: Depending on your income level you can pay anywhere from $0 to 20 percent tax on your long-term capital gain. Additionally, capital gains are subject to the net investment tax of 3.8 percent when the income is above certain amounts. With the Tax Cuts and Jobs Act signed into law in December 2017, long-term capital gains rates are applied based

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5 Mistakes that Sabotage Your Long-Term Wealth

Details: If one investment performed particularly well, it could’ve thrown your allocation out of whack. For example, you could have had an 80 percent stock, 20 percent bond split – but after some stocks did well, you’re now at a 90 percent stock and 10 percent bond allocation, which …

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How Do You Report Cryptocurrency on Your Taxes

Details: And if you lose any money on your investment, you can use it against your other gains and income. The limit is $3,000, but you can carry the rest over to subsequent years when you file. This is a NET capital loss of $3,000 limit. So if you had $10,000 in other capital gains, and $15,000 in losses from crypto, you’d actually be able to claim

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When Does Capital Gains Tax Apply

Details: For example, you may want to sell an asset that has gone down in value, make a business investment or contribute to charity during the same year as the sale. Losses on investments are first used to offset capital gains, which means the less tax you’ll pay on the capital gain.

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ACA Tax Law Changes for Higher Income Taxpayers TaxAct

Details: This includes allocable investment interest expense, investment advisory and brokerage fees, expenses related to rental and royalty income, and state and local income taxes allocable to the investment income. TaxACT calculates the net investment income tax for …

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5 Things to Know About Crowdfunding and Taxes TaxAct Blog

Details: The best advice is to avoid such a scenario. Make sure you plan crowdfunding projects so you receive proceeds early enough in the year that you can match most of your expenses to your income. TaxAct makes preparing and filing your taxes quick, easy and affordable so you get your maximum refund. It’s the best deal in tax.

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Coronavirus and Stock Market Drops Capital Gains Tax

Details: Investment owners world-wide are watching the majority of their investments go up and down right now. Fluctuations on the stock board are considered paper gains or paper losses. Meaning, you haven’t taken action to sell, you’re just observing the market. Market fluctuations alone will not reduce your capital gains or offset your taxable income.

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The Tax Benefits of Contributing to an IRA

Details: But the truth is IRAs are a wonderful type of investment account that virtually anyone looking to save for retirement can obtain and contribute to regardless of how much money they have to invest. There are also some notable tax advantages. What is an IRA? The purpose of an IRA is …

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7 FAQs about the Earned Income Tax Credit

Details: 7 FAQs about the Earned Income Tax Credit. Family Taxes. The Earned Income Tax Credit, or EITC, is a tax credit designed to help low to moderate-income working families and individuals get ahead and put more money back in their pockets. It can provide a significant boost to your federal tax refund each year if you meet certain criteria.

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What to Ask a Financial Advisor Financial Advisor Checklist

Details: From income and sales tax to investment tax breaks, understanding the pages of tax rules is often a difficult task. That’s why having an advisor who understands the implications of taxes from an investment perspective is an essential component to creating a plan that truly considers all aspects of your finances.

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Top 8 IRS Tax Forms

Details: Additionally, if you have any foreign bank or investment accounts or receive distributions from certain foreign trusts, you must report that information on this schedule. Once completed, these totals also transfer over to Form 1040. 4. Form 1099-INT, Interest Income

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Debt Free Investments Archives

Details: Take Control of Your Finances. Sign up to get the latest tax tips, information on personal finance and other key resources sent straight to your email.

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Bitcoin and Taxes: What to Know About Cryptocurrency Taxes

Details: Bitcoins can be used as a digital currency to send or receive funds, pay for goods or services, or simply for investment. Transactions are anonymous and are tracked only via the digital wallet identifiers on a public ledger. Originally used by illicit operators, mainstream companies such as Overstock.com now accept Bitcoin as payment. Enter the

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Capital Gains Tax

Details: Most personal items you own, such as a car, shares of stock, mutual funds, or real estate, are capital assets. According to the Internal Revenue Service (IRS), almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Businesses can own capital assets too.

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Earned Income Tax Credit Calculator TaxAct Blog

Details: Earned Income Tax Credit Calculator. The Earned Income Tax Credit is a refundable tax credit designed in part to reduce the tax burden on low income individuals and families both with and without children. For 2020, the maximum credit is $6,660 ($6,557 in 2019). This amount is determined by the number of qualifying children a taxpayer claims.

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Gift Tax: Do I Have to Pay Tax When Someone Gives Me Money

Details: The person gifting files the gift tax return, if necessary, and pays any tax. If someone gives you more than the annual gift tax exclusion amount ($15,000 in 2020), the giver must file a gift tax return. That still doesn’t mean they owe gift tax. For example, say someone gives you $20,000 in one year, and you and the giver are both single.

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Quarterly Estimated Tax Payments

Details: If your total income tax withholding and timely estimated tax payments equal at least 90 percent of the tax shown on the current year’s return, or 100 percent of the tax shown on your previous year’s tax return, you won’t pay a penalty. If your tax liability last year was …

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529 Savings Plans in 2019 College Savings Plan TaxAct Blog

Details: A 529 savings plan is a state-originated tax-benefitted education savings program that lets you either prepay tuition or contribute to an investment account to save for future tuition, fees, equipment, and room and board. 529 plans are also called Qualified Tuition Programs (QTPs). As the contributor, you make contributions to the tax

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What Happens If You Don't File Your Taxes

Details: In addition, banks, investment companies and businesses send Form 1099 to the IRS to report various types of income you received throughout the year. If you sell real estate, the IRS receives a form showing how much you received from the sale. It may take the IRS some time to match your income up with your tax return, but eventually they will.

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What is Imputed Income

Details: Similarly, so-called “phantom income” is money that you don’t actually pocket, but the IRS still treats those funds as taxable income. Nobody likes getting a larger than expected tax bill, especially on money they never actually had, but because the money (or “imputed income”) shows up on income statements, it’s fair game for Uncle Sam.

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Qualified Business Income Deduction

Details: According to the IRS definition, qualified business income is “the net amount of income, gain, deduction and loss from any qualified trade or business.”. Also, the income must be connected with a U.S. trade or business. Exclusions include capital gains and losses as well as specific dividends and interest income.

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How to Use Form 1099-B for the Stock Sales TaxAct

Details: New Form 1099-B reporting rules. In the past, brokerages reported your sales proceeds to you and to the IRS. However, you were responsible for keeping track of what you paid for stocks and mutual fund shares yourself. For 2012, brokerages are required to report the cost or other basis of shares sold for “covered” securities – basically

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