you hear us talk a lot about tax
planning and retirement well we usually
talk about getting money out of those
tax infested retirement accounts because
that's where most of you have your
dollars
but in your non-ira accounts there's
also tax strategies available there
that can help keep more money in your
pocket through tax loss harvesting but
there's a lot you need to know
and we're going to cover it in this
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video
hi i'm troy sharp ceo of oak harvest
financial group certified financial
planner professional
and host of the retirement income show
when we have investments in our non-ira
accounts
when we buy and sell something it
creates a tax
if there's a gain its tax is determined
first and foremost by the length of time
we've held that investment so if we hold
something for less than 12 months we pay
short-term capital gains tax if we hold
something for
more than 12 months it's long-term
capital gains tax
so that's the first thing to understand
the time frame determines
the short-term or long-term nature or
the tax characteristic
of that gain now at the end of the year
you can take all of your short-term
gains and all of your short-term losses
to net out a number so if we have
6 000 in gains three thousand losses net
those out
we have a positive three thousand dollar
gain that we owe taxes on
same thing with long-term gains and
long-term losses
let's say we have a twenty thousand
dollar game and a thirty thousand dollar
loss
we would have a net negative ten
thousand dollar
long-term loss now these two are taxed
differently
this is important to understand so
your short-term gains less than 12
months
are taxed at ordinary income tax rates
now don't worry about this over here
ordinary income tax rates so you pay
more tax
on your short-term gains so there's a
disincentive for buying selling
buying something and selling it within
12 months
but there can also be advantages to tax
loss harvesting strategies here long
term gains things held more than 12
months
are taxed at either 0 15
or 20 percent
if you're a single filer and you have
income above 441 450
you pay 20 percent on your long term
gains if you are married filing jointly
and have income above 496 600
you pay 20 percent on your long-term
capital gains
now the irs tax code requires
that first and foremost tax
gains of the same character must be
netted against one another so we must
net short-term gains against short-term
losses first
long-term gains against long-term losses
first
these two can then be combined to get to
one net number
but sometimes because short-term losses
are more valuable
than long-term losses because we can use
short-term losses
to offset up to three thousand dollars
of income
that we've earned from our salary or our
wages or ira distributions
per year so because they're taxed
similar to income tax rates these are
more valuable to carry forward
because we can use those losses to
offset income in future years
long-term losses they can only be used
to offset long-term gains and those are
taxed
typically at more preferential rates
which is again
the zero percent 15 or 20 percent rate
now check out the video
that i've done about how to pay zero
percent on your long-term gains and
dividends to learn more about how you
can get into the zero percent tax
bracket
we are able to do this for clients often
and it can save you a lot of money if
you understand these techniques
so there's
really other taxes surprised that we
have to
be careful about when it comes to
investing in the stock market
or just investments in general there's
also an additional 3.8 percent
net investment income tax that kicks in
if you make over 200 000 and you're a
single filer
or 250 000 if you're a married filing
jointly
taxpayer so lots of information here
this is a primer feel free to watch this
video again or reach out to us if you
have questions and need an
analysis done but because of the net
investment income tax
these long-term capital gains rates
actually
adjust so the true
long-term gains and dividend rate
because the long-term gains rate these
are the same taxes we pay on your
qualified dividends
but the true rates when you take net
investment income tax into the picture
are zero percent 15 percent 18.8 or 23.8
because if you make over
this amount of money to fall into the 20
bracket guess what
that means you make more than this and
this automatically kicks in so if you
are a high dollar earner you don't have
a 20 bracket you have a 23.8 because the
net investment income tax
at the end of the day what we need to be
aware of is
when are we buying when are we selling
how are we harvesting the gains and
losses we have throughout the year
to keep our taxes down this is a very
important part
of retirement tax planning it's not just
about taking those dollars out of the
ira
that is critically important those
accounts are tax infested
and you will pay taxes on them at some
point the only question is when do you
pay those taxes
we also have to keep in mind the non-ira
accounts and we have to understand how
all of this works together
inside a plan to keep our taxes down to
give us more money in retirement so we
have more income
more left later in life for medical
expenses health care and to pass on to
those loved ones that we
want to pass the money to obviously this
is a lot of information i don't expect
you to be able to
watch this video and just simply apply
this completely by yourself
this is what we do every single day for
a living to help people just like you
navigate through the retirement and pay
less tax if
you need help doing this there will be a
link in the description down below and
of course you can always reach out to us
through our website
but this is important to keep more money
in your pocket and it's
how you optimize the decisions and
retirement dollars that you have to make
and that you have
in order to have a more successful
retirement if you like this video
share it with a friend or family member
hit that thumbs up hit that subscribe
button and we'll see you on the next
video to keep you more connected to your
money
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