Tax Harvesting, Does it Make Sense?

Calculator with the word tax written in wooden block letters
04 Jan 2017

Even though 2016 has come and gone you may want to consider tax harvesting in your portfolio going into 2017. As always, please consult your personal tax professional for any tax help!

Tax harvesting is the concept of offsetting taxable gains with losses in a given year. This only applies to non-qualified accounts as IRA’s are tax deferred until withdrawn and taxed at ordinary income rates, not the capital gains rate.

Here are a few key points:

-You can offset taxable gains by selling the equivalent amounts in accounts with losses.

-You can deduct up to $3,000 per year in losses against ordinary income even if you have no gains

-You can carry over losses up to $3,000 per year as well

There are other ways to help offset current and future taxes using investments such as Roth and traditional IRA’s contributions. Again, I encourage you to discuss your personal situation with a tax professional. Please feel free to contact any one of our advisor’s at PII and we can get you started in the right direction.

Good Luck! Jeff

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Jeffrey Johnston

Jeffrey is originally from Solon, Iowa. He currently resides in Swisher, Iowa with his wife, Prudence, and his three children, Seth, Ian, and Roman. He graduated from the University of Northern Iowa in 1989, where he majored in Finance and Investments. He has 24 years of experience in the investment and estate planning business. He is currently the President of “Premier Investments of Iowa, Inc.” Jeffrey’s main focus is Estate and Investment Planning for Senior Citizens and Pre Retirees. Jeffrey became a Chartered Financial Consultant (ChFC) in 2001. He is the author of many articles on industry related topics and he is a frequent seminar presenter. He is a Board Member TRIAD Linn County Seniors Against Crime, and he is also a past Board Member of the Heritage Area Agency on Aging Task Force. He is a member of CEO Roundtable in Cedar Rapids, a Daybreak Rotary Member, and a member of the Cedar Rapids Estate Planning Council. In March of 2009, Jeffrey became the host of the Premier Investments of Iowa Financial Hour which airs every Tuesday Evening from 6PM -7PM, on WMT 600 AM Radio. In his free time he enjoys golf, fishing, scuba diving, traveling, and coaching son’s basketball teams.