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Rite of Spring

Mike Zaccardi  |  Feb 17, 2022

TAX SEASON IS HERE. You’ve probably received your W-2 and, if they haven’t arrived already, your investment tax forms may be just days away. If you’re like me, your email inbox has been inundated with tax-filing services pitching their latest deal. I’m no expert on which tax-prep provider is best, but each year I check this page for reviews of the major sites.
I have two other tips that might save you a few bucks.

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Scary Stuff

Richard Quinn  |  Feb 8, 2022

WOULD YOU BASE important financial or life choices on false or misleading information? Of course not. Yet, when deciding on key economic and social issues, that’s exactly what people often do.

I’m addicted to social media. I follow advocacy groups focused on Social Security, health care and taxes, as well as the politicians who are especially engaged in these issues.

Some tweets and memes reinforce what people want to believe or provide the easy answers they seek.

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Wrong Bucket

John Yeigh  |  Feb 7, 2022

IN HINDSIGHT, MY WIFE and I made a mistake by over-saving in tax-deferred accounts. It’s not that we saved too much overall. Rather, we ended up with retirement savings that aren’t diversified among different account types. In fairness, this was caused by the limitations of our work-sponsored retirement plans, coupled with the stock market’s handsome appreciation in recent years.
The classic approach is to build a three-legged stool for retirement—Social Security, a pension if available,

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Mutual Distaste

Adam M. Grossman  |  Feb 6, 2022

I’D LIKE TO START with a seemingly simple question: If you purchased an investment for $19,000 and later sold it for $287,000, would there be a gain or a loss? If you answered that there would be a gain, I’d agree with you. Specifically, it appears the gain would be $268,000. But what if there was no gain and the investment was actually sold at a loss? Could that be the case?

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Missing the Boat

Sanjib Saha  |  Feb 5, 2022

I’VE BEEN WAITING since late last year for a stock market correction. No, I’m not sitting on a pile of cash and looking to time the market. Instead, I’m simply hoping to trim my tax bill.
Last October, I sold the recently vested shares of my company stock and used the proceeds to buy Vanguard Total Stock Market ETF (symbol: VTI). This sell-high-buy-high exchange was meant for diversification, but I also hoped that the market would drop later.

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Collecting Taxes

Matt C. White  |  Feb 4, 2022

WHEN A FRIEND TOLD me about his newfound interest in buying and selling sports trading cards, it reminded me of the joy that collecting brought me in my childhood. And when he asked me to explain the relevant taxation, it got me thinking: The core of the tax code is more logical than we give it credit for. It’s the ever-changing details that make it squirrelly.
If you buy and sell collectibles—whether it be sports cards,

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Year-Round Planning

Logan Murray  |  Jan 18, 2022

MANY FOLKS SPEND December frantically hunting for ways to cut their taxes, whether it’s realizing losses in their taxable investment accounts, making charitable donations or raising their 401(k) contributions for the year’s final few paychecks.
A better strategy: Manage your taxes year-round rather than just at year-end. Filing a tax return is a reactive process—a record of income and deductions that have already occurred. It takes foresight and action to shape what those lines will look like on next year’s tax return.

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Lump It or Leave It?

James McGlynn  |  Dec 31, 2021

AS THEY APPROACH retirement age, workers sometimes get to choose between a monthly pension and a lump-sum payout. It’s a choice I recently made—one I researched carefully. In the end, I made an unusual decision that took a few extra steps.
Let me start at the beginning. In 1984, I began working for American National Insurance Company as an investment analyst. I left the company in 1991, but still qualified for a small pension.

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Juice from Lemons

John Lim  |  Dec 26, 2021

TAX-LOSS HARVESTING is a popular strategy at this time of year. It works best with mutual funds and exchange-traded index funds, for which very similar investments exist. By swapping your losing funds for similar investments, you can realize your tax losses and maintain your market exposure without violating the wash-sale rule.
By contrast, tax-loss harvesting is difficult to implement with individual stocks. Is there a “nearly identical” investment for a company such as Tesla or Amazon?

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Last-Minute Selling

Kyle McIntosh  |  Dec 23, 2021

THIS IS THE TIME of year when many folks rush to purchase last-minute gifts. Not me. While others are out buying, I’m at home selling. You see, this is when I make moves in my brokerage account to limit my tax bill.
What have I been up to? First, I logged on to my Schwab account and reviewed my year-to-date realized gains and losses. I had generated $8,000 in long-term capital gains earlier in 2021 by selling an appreciated exchange-traded fund.

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Taking Shelter

Sanjib Saha  |  Dec 20, 2021

EARLIER THIS YEAR, I swapped the Vanguard Short-Term Bond Index Fund (symbol: VBIPX) in my 401(k) for an inflation-indexed Treasury ETF (VTIP). The trade worked out well: The replacement fund has since fared better, thanks to this year’s accelerating inflation.
To buy the inflation-indexed ETF, I had to open a brokerage subaccount within my company’s retirement plan—a feature some 401(k)s offer, though these “brokerage windows” typically aren’t heavily promoted for fear employees will end up trading too much.

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Pick Your Poison

Howard Rohleder  |  Dec 17, 2021

TRAVELING DURING the holidays? As we drive east out of Ohio and into Pennsylvania, we know to fill the gas tank before we cross the border. According to the Tax Foundation, Pennsylvania has the third-highest gasoline tax in the country, behind California and Illinois, and about 20 cents per gallon higher than Ohio.
All states have to balance their budget. But they take very different approaches. This provides 50 experiments in taxation—and those taxes influence our behavior.

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Poverty Halved

Greg Spears  |  Dec 9, 2021

IF YOU’RE LIKE ME, you almost dread looking at the morning newsfeed. This is why I’m happy to share some good news: The U.S. poverty rate has been cut nearly in half. What’s more, it was accomplished while the economy was practically flat on its back, with tens of millions out of work.
When I was a Washington, D.C., reporter in the mid-1990s, I reported from some of the poorest neighborhoods in Baltimore, Camden and Washington.

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Schooled on Taxes

Jim Wasserman  |  Dec 8, 2021

IT’S PROPERTY TAX time. Amid the holiday mail from friends, many of us get notices of payments due from our friendly local tax assessor.
No one likes getting taxed. But in many places, property taxes make up a huge part of the funding for public education. What always surprises and irks me are those who say the tax is unfair because they don’t “use” the public schools.
One neighbor says he has no children.

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‘Tis the Season

Richard Connor  |  Nov 11, 2021

OPEN ENROLLMENT begins in early November for many employees. This is a great time to see if you’re making the most of your workplace benefits, especially flexible spending accounts, or FSAs.
FSAs allow you to deduct pretax dollars from your paycheck for medical, adoption, commuting and dependent-care expenses. There are some new rules for the accounts this year in response to the pandemic.
First, the basics: During open enrollment, you tell your employer how many dollars you want deducted for these accounts over the next year.

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