Agency owners often forget that smart investing isn’t just about picking stocks, it’s also about managing taxes. As we approach the end of the year, there are several moves you can make now to reduce your tax liability and keep more of your investment gains.
Here’s what’s at stake:
Short-term capital gains and ordinary income can be taxed as high as 40.8%, while long-term capital gains are capped at 23.8%. That’s a 71% higher tax bill simply because of timing. With a few strategic decisions, you could keep that money working in your portfolio or back in your business.
6 Smart Strategies to Act On Before Year-End
- Offset High-Tax Gains with Low-Tax Losses
Sell underperforming long-term stocks to offset short-term gains. This can eliminate high-tax exposure and preserve cash. - Use Your $3,000 Loss Deduction
If your capital losses exceed your gains, you can deduct up to $3,000 against ordinary income and carry the rest forward. - Avoid the Wash-Sale Rule
Don’t rebuy the same stock within 30 days of selling at a loss, or your deduction gets denied. - Use Your Family’s Lower Tax Brackets
Gift appreciated stock to children (not subject to the kiddie tax) or parents in lower tax brackets. Let them sell it and pay far less tax. - Donate Appreciated Stock
Instead of cash, donate stocks that have grown in value. You’ll get a full deduction and avoid paying capital gains tax. - Don’t Donate Losing Stocks
If your stock has lost value, sell it first to claim the loss. Then donate the cash.
Get Strategic Before December 19
Stock transactions take time to settle. Waiting until the last minute can leave tax savings on the table. Get ahead of it now.
Ready to Keep More of What You Earn?
Schedule a call with me today. Let’s review your portfolio, create a personalized strategy, and make sure your investments support your business growth, not drain it at tax time.