Wealth Management Blog | WrapManager

Lower Your Taxes in 2016: Take Advantage of Tax Deductions and Credits

Posted by Gabriel Burczyk | Founder & CEO

January 13, 2016

Lower Your Taxes in 2016: Take Advantage of Tax Deductions and Credits

A new year is a fresh slate in many ways, including the way you manage your taxes. There are numerous tax deductions and tax credits available to taxpayers who know about them and use them. The problem is that many taxpayers either don’t pay attention to them or don’t prepare to use them. Most of these deductions and credits require that you track expenses and keep receipts. These are easy things to do if you create a strategy and system for tracking expenses. Make a goal in 2016 to take advantage of tax deductions and tax credits. You may be able to lower your overall taxes by doing so.

The following tax deductions and tax credits are often overlooked. See if you qualify for any of them. By making a plan now for the coming year, you may be able to take advantage of more tax deductions and credits.

Long Term Care Insurance Premiums

You may be able to deduct premiums paid for qualified Long Term Care (LTC) insurance policies from you 2016 taxes. Some LTC policies qualify as “medical expenses” according to the IRS itemization definition. Talk with your tax adviser about the possibility of deducting these expenses; in many cases you can deduct them to the extent that your total medical expenses exceed 10% of your adjusted gross income.

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Taxes Tax Planning

Mutual Fund Taxation: How to Deal with a 7-Year Bull Market

July 8, 2015

It’s been quite a bull run for stocks, and the benefits are many for those who have been heavily invested in the stock market these last seven years.1 However, there is a downside to such a run, taxes on capital gains distributions. Over the past several years, the amount of capital gains has steadily increased, and the increase will likely continue as long as the stock market continues to rally. This leads investors to wonder what they can do to decrease their tax burden. Before we talk about possible strategies, let’s take a look at the situation. After several years of gains, funds began making payouts, just small payouts at first and gradually larger and larger percentages per share. These payouts qualify as taxable gains, and as such, they are taxable. Additionally, payouts lead to outflows when what you really want to do is preserve your capital. Capital gains don’t often fit into investors’ long-term wealth strategies, so it’s wise to know what other options are available to you. [+] Read More

Year-End Investment Planning Checklist for 2013

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2013 is shaping up to be a strong overall year for the equity markets, and has hopefully been a positive year for many readers’ investment plans as well. As the year draws to a close, it’s time to review a few year-end planning strategies and tips. This should serve as a basic guide to investors to review their tax situations and investment plans before year end. Our suggestions may not apply to all investors, so it’s important to consult a financial advisor and/or tax advisor before considering any adjustments. Tax Planning Strategies to Consider Offset Capital Gains Using a Tax-Loss Selling Strategy Investors are able to offset capital gains with capital losses. If capital losses exceed capital gains in 2013, the excess can be used to reduce taxable income, such as wages, up to an annual limit of $3,000 ($1,500 if married but filing separately). If the total net capital loss is more than the yearly limit ($3,000), taxpayers can carry over the unused portion to the next year.1 [+] Read More

Are There Tax Incentives Associated with Long-Term Care Insurance?

September 5, 2013

When developing a comprehensive financial plan, there are numerous factors to consider, such as when to start taking social security benefits. What about your spouse? How should I allocate my portfolio to ensure my long-term goals are met? What money managers should I hire? And the list goes on. As part of that plan, some people might consider purchasing long-term care insurance to protect their assets in the event they need extensive medical care later in life. Many don’t realize, however, that there could be tax incentives associated with long-term care insurance. The IRS outlines all of the itemized deductions available long-term care insurance premiums that are considered a medical expense1. In order for all or part of long-term care insurance premiums to be tax deductible, however, a few conditions must be met. [+] Read More