Waiting on Year End

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December is when I start checking on the gains and losses of my investments for the past year. This gives me an idea of how much income will be added to my Federal and State tax returns for the year. This year is unique as my old job ended in September and next year there will be much less income to report. I have a couple stocks that I could sell for gains, but I don’t want those gains to appear on this years taxes. I need to wait until January to sell and hope the market doesn’t drop too much by then. Mutual funds generally payout capital gains in December and January, so I don’t want to sell too early and miss out on that. You can’t do much about monthly and quarterly dividend payouts. That will increase your tax obligation. But, I like to have some money in muni bond funds to take advantage of the federal tax break. They don’t pay as well as taxable bond funds, but not having to pay tax on some of your income can be a plus. Next year, I may move out of municipal bonds. I’ll be trying to generate more investment income to make up some of the lost job income. Unless I get lucky next year, I anticipate that my gross income will be much lower. Until then, I’ll be waiting for the year to end.

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