In this episode I talk about how to use the higher standard deductions in conjunction with the favorable capital gain rates to reduce taxes.
If you are in the 10-12% tax brackets… AND REMAIN THERE, you pay no tax on your long term capital gains!
This could be a huge strategy for those who have appreciated positions they were hesitant to diversify because of the tax potential.
Remember, your taxable income is AFTER deductions.
If you’re married and have $70k of gross income after standard deductions you have $46k of taxable income, putting on the low end of the 12% bracket.
In this case you can have around $30k of capital gains before you have to pay tax on them. Take advantage!
I also show you what to look at in your tax return to begin the evaluation of your potential gains in using the tax code.
1040 Lines 8, 9 and 13
Schedule D line 14
Know the numbers on these pages!
Song of the day – Clutch – Escape From The Prison Planet