The 2021 calendar is coming to a close and while many had hoped it would be much different than its predecessor there was still plenty to be wary about. Economic situations for many Americans continue to be a struggle and recent inflation is putting potential hopes of any immediate recovery into jeopardy. As a result, many individuals are making concessions in order to save money and tweaking your portfolio is an option which could have definitive returns on your upcoming tax filing next year.

Over half of Americans own stock and depending on their performance there are potential beneficial options for moves to be made prior to the year end. Doing so could help offset any gains or reduce your tax burden when the time comes to file in the new year. However, there are certain criteria to follow in order to understand execution is key to ensuring the proper results are achieved.

Calendar

Tax year impacts run conveniently with the annual calendar so any action taken during 2021 applies to its return. The same is also true for portfolio management but typically the stock markets are operational on New Year’s Eve giving people the opportunity to make any last minute decisions before the deadline.

End of Year Action

Investors and individuals alike should all be reflective of their financial futures as the calendar turns over. For those with a portfolio, analyzing its current state and identifying any actions which could prove beneficial is important and time is of the essence. 

Flip / Flop

Dumping loss stocks for tax benefits may be productive but don’t expect to reverse the field any time soon. Rules are in place prohibiting individuals from selling a stock and then re-purchasing the same one within a given timeframe to prohibit all investors from executing such trades as the year ends. This flip-flop is illegal and can prohibit certain actions but shouldn’t keep investors from executing their strategy in the event a loss could benefit their tax filing.

Amounts

Despite the opportunity for dumping losses as a potential write-off or to help off-set gains, there are also limitations on the amount. Only $3,000 may be recorded for those reporting losses in a given year. This, coupled with the inability to flip-flop current holdings, helps manage the overall system but taxpayers should also be cognizant of the ability to potentially aid their returns.

If you’re a stockholder and need help determining which loss options may be applied to your given situation, then let the tax professionals at Bloch Rothman and Associates assist you today. In addition to providing answers to your tax related and income questions, they can also take care of multiple other issues dealing with paying or owing back taxes, required audits signaled by either the IRS or an outside agency, or any other personal or corporate wealth management issues. Along with providing a quality tax service, our group can also complete all types of returns or answer any other factors associated with financial issues or concerns you may have. Serving Denver and all of the surrounding areas for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service.

If you have questions about your personal, business, estate, or any other filings, don’t hesitate to contact us today. Available for all of your tax needs, there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and providing the type of service you can rely on whatever your needs may be very soon!