Since L/T capital gains and qualified dividends are taxed at zero if you are in the 15% (or lower) tax bracket, I use this strategy each year and pay little or no federal income tax. This is sometimes called 'tax gain harvesting'. At the end of the year, I take gains such that I try to fill the 15% tax bracket. There are many variables and late gains paid to me to "exactly" hit the top of the 15% bracket, so I am trying to figure out if it is better to stay below the top of the bracket or go over it. If I am below, I leave potential income that is not taxed on the table. If I go over, I pay tax at a 15% rate. I have many years of gains in taxable accounts so I can use this strategy for a while.
We have no earned income and very little other taxable income - almost all of our income is from investments. Any thoughts from others using this strategy?
We have no earned income and very little other taxable income - almost all of our income is from investments. Any thoughts from others using this strategy?