Helpful tax moves to prepare for 2009
Many of us are looking for helpful tax hints to make up for a dismal year. Tess Vigeland talks to Wall Street Journal tax columnist Tom Herman, who gives us some tips on moves we may want to make to prepare for the next tax day.
Tax form with pencil pointing to "Amount you owe" (taxextension.info)
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From Muncie, IN, 12/24/2008
First of all, you can't report any capital loss unless you actually sell shares of your stock. I fear that some people think they can reduce capital gains or report a capital loss on Schedule D by the decline in value of their stock. This misunderstanding could cause monumental errors on 2008 tax returns.
If you actually have sold shares of something, you will get a Form 1099-B in January showing the broker exchange. And yes, any resulting capital loss (up to $3000) is reported as a negative figure on line 13 of the Form 1040. Therefore it reduces all "ordinary" --non-capital gain income on the front of the tax return.
From Bell, FL, 12/20/2008
Always enjoy the show. If this is the venue for questions I have one. If not, sorry! From the show on Sat., 12/20, I have a question about one of the tax tips. 'Twas stated that if losses from taxable stock investments are bigger than gains, an amount up to $3000. could be deducted from income on tax return.
Could I deduct this $3000. from money that is counted as income when rolling over from a traditional IRA to a Roth IRA. Specifically this December I have taken approximately $20,000 from a traditional IRA and rolled it over to a Roth IRA. I am in the 15% bracket and so will owe about $3000. in taxes on this rollover for 2008. If I have $3000. in losses from taxable mutual fund stock investments, can I use this to reduce or eliminate my taxes on the roll-over amount?
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