{"id":43030,"date":"2023-04-10T16:12:43","date_gmt":"2023-04-10T20:12:43","guid":{"rendered":"https:\/\/ilgfinancial.com\/staging\/2370\/?p=43030"},"modified":"2023-04-10T16:12:43","modified_gmt":"2023-04-10T20:12:43","slug":"4-tax-minimization-strategies-to-try","status":"publish","type":"post","link":"https:\/\/ilgfinancial.com\/staging\/2370\/4-tax-minimization-strategies-to-try\/","title":{"rendered":"4 Tax Minimization Strategies to Try"},"content":{"rendered":"

\"\"Keep these tax tips in mind when constructing or revisiting your financial strategy.<\/p>\n

1)\u00a0\u00a0\u00a0\u00a0Search for State and Local Tax Breaks<\/strong><\/p>\n

Have you looked into tax breaks in your state or locality? Regional and local tax incentives, credits, and refunds can help reduce your tax burden.<\/p>\n

Even though reformed tax laws removed miscellaneous write-offs, some states still make them available, or they might have a lesser amount for claiming them.<\/p>\n

2)\u00a0\u00a0\u00a0\u00a0Donate Stock to Reduce Capital Gains<\/strong><\/p>\n

You can prevent capital gains by donating or gifting stocks you hold to qualified charitable organizations. Money that is placed in a donor-advised fund is exempt from capital gains taxes and you might be able to deduct capital gains taxes if you itemize your expenses.<\/p>\n

3)\u00a0\u00a0\u00a0\u00a0Cost-Basis Adjustments for Capital Gains Tax Savings<\/strong><\/p>\n

When you calculate the cost basis of a financial asset you aim to sell, include the reinvested dividends in your calculation. This could increase your cost basis and minimize the amount of capital gain when you sell the investment.<\/p>\n

If you plan to sell a house, you might be liable to pay capital gains tax if the house has increased in value. However, there are also tax credits for selling a primary residence. The Internal Revenue Service permits the exemption just once in two years.<\/p>\n

4)\u00a0\u00a0\u00a0\u00a0See if You Qualify for an Earned Income Tax Credit<\/strong><\/p>\n

Even if you are not obligated to pay federal tax, you could still get a refund from the government. For the tax year 2023, the government offers the Earned Income Tax Credit (EITC), which is a refundable tax credit that can be up to $7,430. EITC is calculated using an equation that considers the taxpayer’s income and family size.<\/p>\n

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Sources:<\/p>\n