Author Topic: Double-check my tax calculations  (Read 1163 times)

brian313313

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Double-check my tax calculations
« on: October 22, 2019, 06:18:33 AM »
I am thinking about selling my VOO before the end of the year to lock in capital gains. This year's income should be < 30k so my capital gains tax rate should be 0. I would buy something similar but probably with someone other than Vanguard so it would not be considered a wash sale. Secondary to this, I am getting health insurance through the exchange and getting a subsidy. I estimated 40k for tax for the year and the capital gains would be 10k at yesterday's close rates. This still leaves me below 40k. I had surgery that will prevent me from working until at least Jan 7 so I should not have more income this year. Does anyone see any problems with my assumptions?

Thanks.

terran

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Re: Double-check my tax calculations
« Reply #1 on: October 22, 2019, 06:34:33 AM »
Wash sales apply to capital loss harvesting, not capital gains harvesting, so you can buy whatever you want. If you were capital loss harvesting you could stay with Vanguard, and just buy something that is not substantially identical to VOO, such as VTI, but you wouldn't want to buy another S&P 500 fund from another company such as IVV. Again, this doesn't matter since these are gains, not losses.

I think you're on top of it, but just make sure you understand how capital gains tax rates work. The capital gain stacks on top of other income, so your total income including the gain needs to stay under the appropriate limit for your filing status to be taxed at 0%.

Remember to account for dividends that will payed out on your taxable investments at the end of the year.

If some of your income is earned income you can contribute to a traditional IRA any time until your tax filing deadline once you have final income numbers in order to fine tune your income to stay within the 0% capital gains bracket and within your ACA subsidy limits.

brian313313

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Re: Double-check my tax calculations
« Reply #2 on: October 22, 2019, 07:35:35 AM »
Thanks. It's been quite a while since I've sold anything and I forgot that wash sale is only for losses.

Phenix

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Re: Double-check my tax calculations
« Reply #3 on: October 22, 2019, 01:16:25 PM »
Thanks. It's been quite a while since I've sold anything and I forgot that wash sale is only for losses.

I try to sell mine annually as soon as they get into LTCG status.  It's a great benefit to being in a lower tax bracket.