Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Using investment losses to offset capital gains and taking long-term capital gains tax instead of short-term gains tax are strategies for investors to receive substantial tax breaks, according The Motley Fool. Investors can also take advantage of the tax benefits offered by Roth IRAs and 401(k) plans, traditional retirement plans, as well as the retirement savings contribution credit. -- The Motley Fool
Investors are advised to review new changes to investment-related taxes to ensure that they won't overpay come tax-filing season, according to Morningstar. Investors should look at the adjustments in dividend and capital gains rates, IRA contribution limits, 401(k) contribution limits, myRA, saver's credit, health savings accounts, education savings, Medicare surtax, and estate and gift tax. -- Morningstar
For this tax season, taxpayers are advised to take note of Obamacares individual insurance mandate that requires them to either pay a penalty for every month they are not covered or obtain minimum essential health coverage, according to Forbes. Taxpayers must understand all the rules governing net investment income tax, including treatment of real estate professionals, self-rental income and sale of a partnership or S corporation stock. The Premium Tax Credit may disappear and may turn into an additional amount owed because in some cases, the taxpayer may have already unknowingly received the credit. -- Forbes
Middle-income earners, especially dual-income couples, are advised to take advantage of several tax breaks targeted at the middle class, according to Kiplinger. Among these are incentives for starting a family, breaks for saving for retirement, credit for earned income tax, incentive for child care, zero tax on capital gains and tax credits for college education.
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