BUZ LIVINGSTON: Signs of intelligent life in D.C.

Published: Thursday, October 24, 2013 at 03:27 PM.

 Year End Tax Planning Tips

It goes against human nature to sell a losing position. We hate to admit failure and I’m guilty, too. However by selling a losing position you can offset long term gains or up to $3,000 of ordinary income. Sell a loss position then replace it with a low-cost exchange traded fund and increase diversification.

Couples need to be aware their combined income could put them over the threshold levels for new 2013 taxes. We recently worked with a couple where one made more than $250,000 but the spouse made significantly less. The higher earner’s HR department could easily make the appropriate changes for his .9 percent Medicare surtax but the spouse was in the dark. High earning couples could also pay an additional surcharge (3.8 percent) on investment income so “harvesting” any losses will reduce your tax liability. Call your CPA and discuss any necessary changes.

For anyone who took a defensive position before the debt crisis, sigh, remember market timing does not work but time in the market does.  Unfortunately the Georgia Bulldogs’ defense remains missing.

Buz Livingston, CFP, has a Blue Mountain Beach based fee-only, hourly financial planning and investment management firm. For more information, visit www.livingstonfinancial.net.



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