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Its
Time!
In
England, teatime is a good time. For golfers tee time is a
very good time. But for taxpayers "T" time is not
much fun. As much as we don't like the fact, tax time is quickly
coming up. Many taxpayers start thinking about their taxes
at the end of January when they get their W-2 from their employer.
Investors need to start thinking about their taxes just after
the leaves start falling on the lawn. The important fact to
keep in mind is that although our taxes aren't due until mid-April,
but for a few exceptions, they are carved in stone December
31. And the last week of December, although ahead of the close
of the tax year, is not the time to be exiting a position
if you want to maximize value. What should be on an investors
"To Do" list? You need to see what shape your
tax and trading records are in. Some low cost brokerage
firms only email daily or monthly statements. Have you saved
these emails? Most firms send trade confirmations but they
don't pair up both sides of the trade. Pairing up both sides
of the trade can be confusing especially if the position was
entered or exited with less than the total number of shares
ultimately held. Trade confirmations can also be confusing
if you made hundreds or thousands of trades during the year.
Making an appointment with your tax advisor before the end
of the year makes sense to discuss your individual situation
before its cast in stone. Investors may also want to sit down
and go through the process of preparing a copy of next year's
tax return before the year winds down. You may not only find
you need to take some losses or profits, but you may need
to do some charitable giving, or do some repairs on a piece
of rental property. A visit with your tax advisor or a run
through next year's return can shed some light on what's needed.
So get your paperwork in order, and schedule an appointment
with your tax advisor for the next handful of weeks. Next
week we will discuss a couple of tax strategies you can employ
to make your taxes and investment results shine brighter.
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