The tax code is much more fluid than the public is truly aware of and deductions and credits come and go all the time. Deductions like mileage for business owners change with the cost of gasoline, for instance, and can go up and down annually. Often, it is actual programs that come and go, like energy tax credits or being able to transfer an IRA to a charity directly without paying income tax but still satisfying RMD requirements. Often, these programs are temporary, and depending on whether the government believes that they have met their objectives, sometimes expire, or may become permanent. Capital Gains has remained on sale! It’s been changed over the years, but under the original Bush tax cuts was dramatically reduced, and then what was intended to be temporary has been extended again and again. A totally misunderstood gem, most of the public thinks the tax would be substantial, so they are not taking action on capitalizing a gain, even though for the most part the tax would be less than what they imagine, often resulting in no tax at all! Real estate and stock portfolios (which are at an all-time high range) that likely should have some profit taking and other items that receive capital gains treatment should be closely examined, and a tax forecast completed to calculate the actual gain for clients, to replace what is imagined with a real number! Even people in “zero tax brackets” should do this to step up the cost basis on items, potentially free of tax!!
Although this may sound complicated and expensive, it is actually EASY AND FREE!
See your tax planning professional today to calculate the tax on any item you want to sell! You might discover its a yard sale bargain price!