How to Win by Losing: The Tax Loss Harvesting Game

Have you ever felt like you're paying more taxes than you should? Well, you're not alone! Uncle Sam has a way of making even the most profitable investments feel like a loss. But what if there was a way to ease your tax burden on these winners? That’s where tax-loss harvesting comes in, a strategy that allows you to offset your gains with losses.

Think of it like this: imagine you're a farmer and you've had a bad year. Your crops have withered and you've lost a lot of money. But then you remember that you have a giant pile of manure sitting around. So, you decide to sell the manure to a fertilizer company. Now, you've turned your loss into a gain!

Tax-loss harvesting is similar. You sell your losing investments to offset your winners, lowering your taxable income. And just like the farmer, you'll have more money in your pocket to do with as you please.

Here are a few tips to get you started:

• Identify your losing investments. Take a look at your portfolio and see which investments have lost money this year. These are the ones you'll want to sell for tax-loss harvesting.
• Consider your tax bracket. The amount of money you save by tax-loss harvesting will depend on your tax bracket. The higher your tax bracket, the more you'll save.
• Don't sell your investments just for the tax break. Make sure you still believe in the long-term potential of your investments before you sell them.

If you're not sure how to get started with tax-loss harvesting, contact us for a free consultation.

Please check out our Position Wealth Video Blogs and the Position Wealth Website.

Happy Harvesting!