Year-End Tax-Smart Moves To Consider


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MINT HILL, NC – As 2020 draws to a close, you might wonder how you can improve your tax situation – especially in terms of investment-related taxes. Here are some year-end ideas to consider:

First, you could sell investments that have lost value and use the losses to offset income from your capital gains from selling appreciated investments. If you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income. See your tax advisor before making this move.



Next, consider avoiding purchases in mutual funds about to pay out taxable distributions.

If you haven’t maxed out contributions to your 401(k), IRA or health savings account, make additional ones for 2020 if you can.

Finally, required minimum distributions, or RMDs, from your 401(k) or traditional IRA are waived this year because of the COVID-19 pandemic. If you don’t need the money, leaving it in your accounts can help you reduce your taxable income. Alternatively, you could consider a Roth conversion to reduce your RMDs and taxes in the future.

Your investment-related decisions should be based on achieving your long-term goals. But taxes matter, so do what you can to control them.

If you have any questions, please contact me at 980-859-2549 or by e-mail at brandon.monette@edwardjones.com

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor

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