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You can't necessarily do it last minute. You have to realize the loss by the end of the tax year (Dec 31), which may be months away from the day you file taxes.

by junar 7y ago

You can't necessarily do it last minute. You have to realize the loss by the end of the tax year (Dec 31), which may be months away from the day you file taxes. On the other hand, if you can deduct traditional IRA contributions, you can make prior-year contributions up until the tax filing deadline, and keep your money. If you're eligible for an HSA or solo 401k, you can also use those to similar effect.

PhantomGremlin 7y ago
The devil is in the details. (When isn't it?) For example, regarding health insurance subsidies (mentioned in the article), deductible IRA contributions must be added back when calculating your income. As are other sources of income. E.g. tax-exempt municipal bond income doesn't count for Federal taxes but it does count for income limits for the health care subsidy. Offhand, I'm not familiar with income limits for an HSA. It's quite likely that allowed income sources and deductions vary for these various programs.
- junar 7y ago
  > deductible IRA contributions must be added back when calculating your income Not true. IRA/401k/HSA reduce MAGI for healthcare purposes. Do not confuse MAGI for the healthcare marketplace with MAGI on your tax return; those are two different figures. https://www.healthcare.gov/income-and-household-information/income/#magi https://www.healthcare.gov/income-and-household-information/... https://www.healthcare.gov/reporting-deductions/ https://www.healthcare.gov/reporting-deductions/
  - PhantomGremlin 7y ago
    Ha. You're right about IRA deductions with respect to healthcare. But I knew that I saw IRA being added back somewhere! It turns out I was thinking of FAFSA. IRA deductions are added back for computing income for financial aid purposes. Tax exempt interest is added back for both healthcare and FAFSA. That's why tax programs and tax accountants are essential. It's difficult for people who don't do this for a living to remember all of this.

by junar 7y ago

PhantomGremlin 7y ago

The devil is in the details. (When isn't it?) For example, regarding health insurance subsidies (mentioned in the article), deductible IRA contributions must be added back when calculating your income. As are other sources of income. E.g. tax-exempt municipal bond income doesn't count for Federal taxes but it does count for income limits for the health care subsidy. Offhand, I'm not familiar with income limits for an HSA. It's quite likely that allowed income sources and deductions vary for these various programs.

junar 7y ago
> deductible IRA contributions must be added back when calculating your income Not true. IRA/401k/HSA reduce MAGI for healthcare purposes. Do not confuse MAGI for the healthcare marketplace with MAGI on your tax return; those are two different figures. https://www.healthcare.gov/income-and-household-information/income/#magi https://www.healthcare.gov/income-and-household-information/... https://www.healthcare.gov/reporting-deductions/ https://www.healthcare.gov/reporting-deductions/
- PhantomGremlin 7y ago
  Ha. You're right about IRA deductions with respect to healthcare. But I knew that I saw IRA being added back somewhere! It turns out I was thinking of FAFSA. IRA deductions are added back for computing income for financial aid purposes. Tax exempt interest is added back for both healthcare and FAFSA. That's why tax programs and tax accountants are essential. It's difficult for people who don't do this for a living to remember all of this.