Act Now to Save 2019 Taxes on Your Investments

Do you have investments outside of tax-advantaged retirement plans? If so, you might still have time to reduce your 2019 tax bill by selling some investments — you just need to carefully select which investments you sell.


Balance Gains and Losses

If you’ve sold investments at a gain this year, consider selling some losing investments to absorb the gains. This is commonly referred to as “harvesting” losses.

If, however, you’ve sold investments at a loss this year, consider selling other investments in your portfolio that have appreciated, to the extent the gains will be absorbed by the losses. If you believe those appreciated investments have peaked in value, you’ll essentially lock in the peak value and avoid tax on your gains.

Review Tax Rates

At the federal level, long-term capital gains (on investments held more than one year) are taxed at lower rates than short-term capital gains (on investments held one year or less). The Tax Cuts and Jobs Act (TCJA) retained the 0%, 15% and 20% rates on long-term capital gains. But, through 2025, these rates have their own brackets, instead of aligning with various ordinary-income brackets. For example, for 2019, the thresholds for the top long-term gains rate are $434,551 for singles, $461,701 for heads of households and $488,851 for married couples.

But the top ordinary-income rate of 37%, which also applies to short-term capital gains, doesn’t go into effect for 2019 until taxable income exceeds $510,300 for singles and heads of households or $612,350 for joint filers. The TCJA also retained the 3.8% net investment income tax (NIIT) and its $200,000 and $250,000 thresholds.

Check the Netting Rules

Before selling investments, consider the netting rules for gains and losses, which depend on whether gains and losses are long term or short term. To determine your net gain or loss for the year, long-term capital losses offset long-term capital gains before they offset short-term capital gains. In the same way, short-term capital losses offset short-term capital gains before they offset long-term capital gains.

You may use up to $3,000 of total capital losses in excess of total capital gains as a deduction against ordinary income in computing your adjusted gross income. Any remaining net losses are carried forward to future years.

Consider Everything

Keep in mind that tax considerations alone shouldn’t drive your investment decisions. Also consider factors such as your risk tolerance, investment goals and the long-term potential of the investment. We can help you determine what makes sense for you.

Illinois’ Tax Amnesty Programs Run From October 1 to November 15, 2019

Illinois has enacted two tax amnesty laws – one covering taxes administered by the Illinois Department of Revenue, and the other covering franchise taxes and license fees administered by the Illinois Secretary of State. These acts provide taxpayers the opportunity to pay outstanding tax liabilities and receive penalty AND interest forgiveness on taxes paid in full during the amnesty period.

Taxpayers may participate in the programs any time between October 1, 2019, and November 15, 2019.

Illinois Department of Revenue – Tax Types and Periods

The program covers taxes due from periods ending after June 30, 2011, and prior to July 1, 2018.  The tax amnesty program applies to most taxes collected by the Illinois Department of Revenue such as:

  • State income tax (individual, corporate, and partnership)
  • Sales and use tax
  • Real estate transfer tax
  • Payroll withholding
  • Excise and utility taxes (telecom, hotel, liquor, utility, etc.)

To report a tax (or additional tax) liability, you’ll need to file an original or amended tax return and make full payment of the tax during the amnesty period.  If the tax due has been referred to a private collection agency, payment must be made to the private collection agency.

Illinois Secretary of State – Tax Types and Periods

The program covers franchise taxes and license fee liabilities for any tax period ending after March 15, 2008, and on or before June 30, 2019.  Eligible tax liabilities include:

  • Unreported increases to paid-in capital
  • Initial and annual franchise taxes

Participants eligible for the franchise tax amnesty program include Illinois corporations, foreign (e.g., Delaware) corporations authorized to transact business in Illinois, and all foreign corporations that have been transacting business in Illinois without authority.  To participate, you’ll need to file a one-page amnesty petition that sets forth all the documents filed under the amnesty program and make full payment of the tax during the amnesty period.

If you have questions about whether you qualify for these programs, please contact your local Scheffel Boyle office.

Friends Trivia for the Troops

Could we BE more excited?!

What could be better than a night of Friends Trivia? Well, we channeled our inner UNAGI and thought, Friends Trivia for the Troops of course! All proceeds and donations received from this event will go toward our Scheffel Boyle Shares project for the year of assembling care packages for troops deployed overseas. Please consider participating for a night of fun and philanthropy!

Friends Trivia for the Troops
Big Daddy’s Edwardsville
Wednesday, November 13th
Registration Opens at 6:30, Trivia Starts at 7pm

Reserved seating is SOLD OUT! Overflow seating will be available that evening first come, first serve for a limited number of tables on a heated, enclosed patio.

Be sure to follow the event on Facebook to get updates!


Want to earn some mulligans?

Bring a donation for our Troops from the wishlist below and you’ll earn mulligans! Max of 5 mulligans per team.

  • High-quality socks (black crew length)
  • Good soap, shampoo, body wash, or face wash
  • Toothpaste, toothbrushes, and floss
  • Travel-size deodorant
  • Sodoku books and crossword puzzles
  • Instant coffee
  • Crystal Light drink packets
  • Instant sweet tea packs
  • Reese’s, M&Ms, and other candy
  • Fruit snacks
  • Baby wipes
  • Sunscreen
  • Hand sanitizer
  • Lens cleaning cloths
  • Magazines and books
  • Board games
  • Decks of cards
  • Puzzles
  • Batteries (AA and AAA)
  • Slim Jims
  • Protein Bars
  • Gum
  • Sunflower Seeds
  • Twizzlers
  • Beef Jerky
  • Hair ties
  • Bobby pins
  • Dried fruit
  • Stamps
  • Words of encouragement/letters/LOVE

 

Download our event flyer here!

Robyn Klingler Featured as a “Top Employee”

We are excited to share that Robyn Klingler, CPA has been featured as a “Top St. Louis Employee” by St. Louis Small Business Monthly in the magazine’s annual feature. Robyn is a Manager and has been with us since 2003. With more than 20 years of experience in public accounting, she is a valuable member of our A&A Quality Control Team and specializes in audit and assurance practices, particularly for governmental clients, school districts, and for-profit entities. Robyn is also responsible for providing in-house training and continuing education for our team. She is a graduate of the University of Illinois, a recipient of the Carrollton High School Alumnus Award, and a well-respected member of her local community of Carrollton, Illinois.

Each year, Small Business Monthly polls its readers and past honorees to find the “A-Players” for this feature. We are very proud of Robyn and all she has accomplished. Congratulations, Robyn!

Click here to read Robyn’s feature and learn about the other honorees.