tag:blogger.com,1999:blog-5621914599310831423.post8268682399782633972..comments2024-03-28T18:17:18.688-07:00Comments on The Retirement Café: Zero Capital Gains TaxDirk Cottonhttp://www.blogger.com/profile/05616143752082768155noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5621914599310831423.post-75922311348692840562017-06-10T04:02:26.876-07:002017-06-10T04:02:26.876-07:00In other words, if the course helps them keep pace...In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction.<a href="http://www.tashastaxtalk.com/" rel="nofollow">tax write offs</a><br />Janehttps://www.blogger.com/profile/18393290270061893199noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-66531259394680737932014-06-21T09:13:21.271-07:002014-06-21T09:13:21.271-07:00Good point. And don't forget the insidious &qu...Good point. And don't forget the insidious "tax torpedo" that blows up when RMD's make your Social Security benefits taxable. (See "Will Your Social Security Benefits Be Taxed?" at http://theretirementcafe.blogspot.com/2013/02/are-social-security-benefits-taxed_9.html )Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-37089140793968789952014-06-07T12:54:50.861-07:002014-06-07T12:54:50.861-07:00And it is not uncommon for people in the 15% brack...And it is not uncommon for people in the 15% bracket to end up paying 30% tax on the capital gains - sort of. The way that happens goes like this: They have ordinary income items that leaves them say $10,000 under the top of the 15% bracket. They realize 10,000 of long term capital gains - at that point the tax on the capital gains is zero. But then something happens towards the end of the year - maybe they forgot about $10,000 of income, or need more cash and take it out of the IRA. That adds $10,000 at ordinary income, pushing all the capital gains into the next bracket up, where it is taxed at 15% instead of the 0% that was planned on. Plus the new income is also taxed at 15%. Net increase is a 30% tax. Now it is not really due to the long-term capital gains, but the LTCG is clearly a part of the surprise factor. So be aware of the result of pushing above the 15% bracket with LTCG involved - that's the situation with the biggest surprise factor!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-12697935864662417632014-05-25T21:55:21.091-07:002014-05-25T21:55:21.091-07:00Hitching my wagon to Anonymous' post and Dirk ...Hitching my wagon to Anonymous' post and Dirk Cotton's response here . . .<br /><br />It is certainly wise to take into account the impact of income taxes on one's investments, including (especially) their residence in taxable or tax-deferred or tax-free accounts. At the same time, I think we need to be mindful of the extent to which the investment -slash- asset allocation dog is wagging the tax consequences tail, versus vice versa.M J Rnoreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-1767384263188212792014-05-23T08:18:55.852-07:002014-05-23T08:18:55.852-07:00And those are also the people least likely to have...And those are also the people least likely to have a lot of capital assets to sell. Many retirees will squeeze some gains into the zero tax bracket, but the amounts are limited. Like you, I am hesitant to make a long-term financial decision like paying off a mortgage based on today's tax law. As my tax professional told me yesterday, "This stuff changes constantly. It's a full time job to keep up."Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-20098887408924147882014-05-23T07:36:51.064-07:002014-05-23T07:36:51.064-07:00I have assumed that the primary beenfit to holding...I have assumed that the primary beenfit to holding equities in a taxable account would be that the dividends and capital gains may be taxed at a lower preferred rate than ordinary income once there is enough income to start moving up in the marginal tax rates. I expect that we will have a cascade of ordinary income when we retire basedo n Social Security, pension, and non-Roth retirement accounts. As a result, having long-term capital gains and dividends may save some tax money because of the difference between the marginal tax rates and the capital gaIins/dividend rates. However, these rates can be changed by Congress with the stroke of a pen, so I don't make too many assumptions about taxes a coupelfo decades from now. I think the only people who will be able to have zero capital gains taxes will be in the same income bracket as people who don't have to pay tax on 85% of Social Security, so generally on the relatively poor side.Anonymousnoreply@blogger.com