This time of year as you prepare for taxes, you might glance at an documents and see some capital gains taxes you may have overlooked.
Many mutual funds in December pay shareholders capital gains distributions that they have accumulated throughout the year.1
Typically, mutual fund companies start making estimates about distributions as early as November and most finalize the payment by mid-December. Unfortunately for us, this can cause undesirable tax consequences.
It’s important to remember that if your mutual fund is in a tax-deferred account—and you are reinvesting distributions—the potential distributions may be a non-event at this time. But you may owe taxes when you begin to sell your holdings.
If your mutual fund is in a taxable account, you may owe 2022 taxes on the distributions. It doesn’t matter whether you reinvested the distribution or accepted payment.
At Epic Capital, we take tax planning very seriously. Tax advantaged investments, tax-deferred growth, and the strategic placement of assets to minimize your yearly tax bill are just some of the actionable strategies that can be employed within the management of your wealth. We advise you on which assets should be utilized first in retirement, when you should harvest a tax-loss or take a capital gain, the tax implications for holding particular investments, and the list goes on.
Most of the larger mutual funds companies have posted information on their websites regarding year-end distributions. But the estimates can be confusing, so please feel free to contact us, we may be able to provide some guidance.
Remember, this is for informational purposes only and is not a replacement for real-life advice. Mutual fund distributions may only be one part of your overall tax situation, so make sure to consult your tax, legal, or accounting professional before modifying your strategy.
For more insights and resources, be sure to sign up for our Weekly Market Commentary. Follow our YouTube channel where we regularly post our Epic Market Minute videos. Follow us on LinkedIn, or like us on Facebook. And as always, please don’t hesitate to reach out to a dedicated service professional at Epic Capital.
Last week was epic for market-watchers. A Federal Reserve (Fed) rate hike, a much-anticipated gross domestic product (GDP) report, and the busiest week of earnings season got most of the headlines. There was even a surprise out of Washington D.C., with a Schumer-Manchin agreement on a climate-healthcare-tax bill and some inflation data that added to … Continue reading “Market Update: Big Week for Market Watchers”
If you are approaching your seventies, get ready for required minimum distribution. You may soon have to take RMDs, as they are called, from one or more of your retirement accounts.
What would you do with a windfall? It’s a question I’ve read or heard a lot lately. Considering the Mega Millions jackpot ballooned to $1.34 billion, yet the lucky winner has yet to be revealed. It’s safe to say most of us have thought about what it would be like to win.
We all know the value of a good credit score. We all try to maintain one. Sometimes, though, life throws us a financial curveball and that score declines. What steps can we take to repair it? Reduce your credit utilization ratio. Your credit utilization ratio (CUR) is the percentage of a credit card’s debt limit … Continue reading “Ways to Repair Your Credit Score”
When you marry, you buy life insurance. Right? You buy it out of consideration for your spouse, and also realize that in the even of either your untimely death or your spouse’s untimely death, your household could be left with one income to shoulder expenses that may not lessen.
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >