End of Year Tax Tips for the Savvy Investor

by Stacy Francis, CFP®, CDFA

You only have a few weeks left to take the bite out of your annual taxes. Here are some tax strategies that you can put into effect before the end of the year, saving money when it comes time to file your annual tax return.

Time capital gains and losses. If you lost money on a stock you sold this year, you can use that loss to avoid paying tax on gains you made in a mutual fund or from a more profitable stock sale. You can offset up to $3,000 of ordinary income.

Look into tax saving investments. Tax-free investments can escape federal, state, or local taxes. Give Uncle Sam the old heave hoe and say no to taxes.

Exercise stock options with care. When stock options are exercised, the gain realized between the grant price and the market price will be included in W-2 income and taxed as ordinary income. Therefore, consider delaying the exercise of any more nonqualified stock options until after year-end.

Maximize those deductions. When itemizing your deductions, you're allowed to group so-called miscellaneous deductions to the extent that they exceed 2 percent of your adjusted gross income. Included in those miscellaneous deductions are any materials used exclusively for investing -- subscriptions to financial magazines, fees for a financial planner, tax prep fees, software, etc.


Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.