FAQ

Everyone wants to know the best strategies to minimize your tax bill.  Here are several strategies that may help:

• The old adage still applies:  accelerate expenses and postpone income.  This rule still applies as you generally pay less tax in the future so you accelerate your expenses to this year.  Doubling up on real estate taxes and charity can still work if it applies.

• Give appreciated stock to your charity.  That way you get to take the appreciated value as a deduction.

• Be sure of the timeliness of your buying and selling.  Purchases and sales of the same asset under a year are short term and taxed as ordinary income.  And don’t forget that a purchase and sale and purchase and sale of the same asset within 30 days are subject to wash sale rules for losses.  Of course short term gains are taxable unless you have other losses.

• Maximize your capital losses if you must sell.  Use losses to offset gains to a maximum of $3,000 total losses.

• Sell assets of higher value by matching the sale against the highest price paid.  For example, suppose you purchased shares of Netflix at various times from $75 to $390.  If you sell today at $337, sell the shares you bought at greater than today’s price to show a loss.

• Don’t earn interest.  Interest is taxable at your highest rate.  If you prefer the interest, use tax-free munis or tax-free money markets.

• 2024 IRS Standard Mileage Rate for business is $.67.  The Medical Mileage Rate for the year is $.21 and the Charity Mileage Rate is $.14.

• If you are considering a ROTH IRA, the phase-out limitations are $230,000 MFJ and $146,000 for Single for 2024.

• Traditional IRA maximum contributions for 2024 for eligible taxpayers are $7,000 under 50 and $8,000 over 50.  If you are eligible, this is still the best savings return of any investment.  Make sure you check for your eligibility.