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Tax tips for individual investor?

2011 was my first year investing. I had a mixed portfolio of some individual stocks, and some mutual funds. I'm about to file my tax return, any tips?

Feb 14, 2012 by Lena from St Louis, MO in  |  Flag
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In general, I put investment decisions ahead of tax decisions. However, you should attempt to invest in the more tax-efficient / advantageous manner. For example, I tend to hold equities or equity funds in taxable accounts so that if I may harvest losses for tax benefit. It can be advantageous to hold assets that provide a higher level of current income in a non-taxable account, because when you don't have to pay taxes on the income your tax equivalent yield is increased. When buying mutual funds, be careful of purchasing late in the calendar year, as you may purchase embedded gains that may be paid out near year end. You can research those possible gains online or call the fund provider. I hope that this helps!

Comment   |  Flag   |  Jun 08, 2012 from Denver, CO

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Just be sure to reconcile your gains and losses on the sale of stock on your Schedule D. Pay special attention to the timing of the sales. If you held an investment for less than 1 year, you will pay ordinary income tax, more than 1 year, you will pay long term cap gains.

Comment   |  Flag   |  Feb 14, 2012 from Orland Park, IL

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Lena, I would advise you to form a relationship with a CPA. Filing a tax return is complicated and the rules are changing all the time. The right CPA relationship can also all serve you has an broad advisor , sharing views on budgeting, investing, estate planning and even life in general. I am an investment advisor and rely heavily on my own CPA for guidance in many areas- and advise my clients to do the same. Best of luck!

Comment   |  Flag   |  Feb 15, 2012 from Port Washington, NY

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Ryan Level 19

One thing you might see is that you made money so you owe Uncle Sam! An idea we share with clients is to let your account pay for any taxes due by taking a little out of your investments. Just be sure to use taxable funds and not IRA funds. If you are looking longer term, please consider a traditional or Roth IRA. Both have significant benefits.

Comment   |  Flag   |  Feb 23, 2012 from Gettysburg, PA

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