Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
5 tax breaks on Congress’s new agenda: The state-level sales-tax deductions are among the tax provisions that expired early this year, which Congress will have to tackle soon, according to The Wall Street Journal. Internal Revenue Service Commissioner John Koskinen has warned of possible delayed refunds and tax-filing disruptions if Congress doesn’t act this year. Tax relief for mortgage-debt forgiveness, rollover of IRA asset donations to charity and breaks on educator expenses and tuition and fees are also highlighted. -- The Wall Street Journal
The most-overlooked tax deductions: Many taxpayers pay more than what they're supposed to pay in taxes every year because they tend to overlook some tax deductions, according to Kiplinger. Some of these tax deductions, which will allow them to save substantially, include state sales taxes, re-invested dividends, and out-of-the-pocket charitable deductions. Other tax deductions that can help taxpayers save are student-loan interest, job-hunting costs, and moving expenses as a result of a new job. -- Kiplinger
6 tips for smart year-end tax planning: Investors could effectively manage their taxes by year-end by making tax-advantaged savings plan contributions and keeping withholding tax close to their actual tax liability, according to Forbes. Tax-loss harvesting and charitable contributions could also lessen tax liabilities. Further tax deductions could be received by spending their annual gift tax exemption and advancing tax payments. -- Forbes
Top five most costly investment mistakes: Excessive cash and payments for investment fees are among the most expensive mistakes investors face in investing, according to Forbes. Spending too much time on investment decisions, lacking savings and disregarding tax loss harvesting could also be detrimental to investment performance. -- Forbes
Tax loss selling: Don’t lose money trying to save on taxes: Losing money during tax reduction can be avoided if investors shun tax-loss sales during the last quarter and buy during a tax-loss stampede, according to Forbes. Investors can further bolster their strategy by taking advantage of their shares after establishing a tax loss. Doing so can enhance their after-tax returns. -- Forbes
Bill Gross' parting gift to fund Shareholders: Higher taxes?: Despite the exit of Bill Gross from PIMCO Total Return, tax consequences for fund investors appear minimal compared to the bigger gains other funds are likely to distribute this year, according to Motley Fool. A study found that the fund could produce about 2% of taxable gains with an approximately 20% sell off of the $200 billion fund’s total assets but the estimate assumes procedures used before will also be utilized to retain distributions in practicable levels. Investors should make sure they don’t buy shares before capital gains distribution. -- Motley Fool
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