Avoid capital gains taxes, or lower your capital gains tax liability, by claiming losses, deducting contributions to a health savings account, selling a residence, renovating a home and contributing to retirement funds, according to David John Marotta for Forbes. The business magazine lists 14 specific tax loopholes to avoid capital gains taxes.Know More
Keep track of your capital losses throughout a tax year to write them off. Losses offset capital gains, and as of 2014, excess losses up to $3,000 can offset income rather than capital gains. Losses can be stored up for future tax years, notes Marotta.
Exclude up to $250,000 of profits from the sale of your primary residence from capital gains, according to Realtor.com. Couples who file jointly can exclude up to $500,000 of profits from the property's sale. The home must be your primary residence, owned in your name for at least two years and lived in for two out of the past five years to make the claim. This type of exclusion works for a home that increased in value since you bought it, and renovations can increase a home's value even more, states Marotta. Contribute money to a traditional IRA, 401(k) retirement plan, Roth IRA and health savings account to defer paying taxes. Money sent to these accounts does not go toward income for tax purposes, and HSA contributions are tax-deductible altogether. The caveat is that these methods take a lot of paperwork, time and effort to achieve.Learn more about Taxes
As of 2014, the capital gains tax rate for California income taxes is 10.3 percent for individuals who make between $254,250 and $305,100 per year, according to Robert W. Wood for Forbes. The rate goes up to 13.3 percent for people who make $1 million or more annually.Full Answer >
A tax table for long-term capital gains rate is a table dictating the tax rates applicable to the sale or disposition of capital assets held for a year or more, according to the Internal Revenue Service. New tables are often issued yearly as tax rates change.Full Answer >
Generally, the IRS asks about dependents, age, income, sources of income, home ownership, tax identification numbers, marital status, country of residence, assets and channels of contact, among other questions, according to the IRS.gov FAQ page. The IRS does not require the same type of information from every entity. For instance, the information demanded from retirees is different from that required of employees.Full Answer >
Plan for your retirement with regular savings that take advantage of deferred taxes and employer contributions, states CNN Money. You need to ensure that the returns beat inflation and avoid touching your retirement funds until your actually retire, advises the Department of Labor.Full Answer >