As 2020 draws to a close, you might wonder how you can improve your tax situation, especially in terms of your investments. Here are a few year-end ideas to consider:
— Be a tax-loss harvester. In taxable investment accounts, you could sell investments that have lost value and use the losses to offset income from any capital gains you might have from selling investments that have appreciated. If you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income, including your salary and interest income. Unused net capital losses can carry over to future years. This strategy works best if you’re in a higher tax bracket now than you expect to be in the future.