Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
The capital gains tax rate: How you can pay less: Capital gains tax rates are generally lower than other rates, but the tax hit can still be mitigated through strategic planning, according to The Motley Fool. An investor can offset capital gains with capital losses. For example, an investor with $10,000 in long-term gains and $5,000 in losses would be on the hook for just the $5,000 in net gains. -- The Motley Fool
Time to assess your financial fitness: The Dow Jones industrial average is a poor indicator of the performance of one's own investment portfolio because it tracks just 30 of the biggest U.S. companies, according to The New York Times. Other personal markers that an investor should pay more attention to are market percentage changes, the savings rate, the tax rate, and the income replacement rate. -- The New York Times
3 tax deductions that could lead to an audit: When filing returns this tax season, taxpayers need to ensure they submit accurate data, especially when they take a lot of deductions, to avoid a tax audit, according to The Motley Fool. They should pay particular attention to home-office or work-related deductions, as these usually cause an audit. Charitable contributions that are unusually big can also trigger a tax audit. -- The Motley Fool
Watch out! Taxes don't trump fundamentals: Clients should not make investing decisions based on tax considerations, according to CNBC. They may rather sell stocks and pay the dues than try to avoid the taxes, a move that could be more costly. Whether your client likes it or not, the government is going to take its cut. -- CNBC
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