Capital Gains

You can only offset capital gain income with capital losses. 

Offsetting capital gains usually requires harvesting some losses.  There may be investments you can sell that are in a loss position.  You can check with your broker and also ask about selling based on the specific identification method rather than the traditional first in first out method. 

 

Here are some tools that may help you:  
TurboTax Investment Hub

Also,  this will help clarify the no tax on tips from the Big Beautiful Bill -  One Big Beautiful Bill 

 

You can see how the changes from the new bill impact you here - Tax-reform-calculator 

 

Hope this helps!

Cindy

Regarding tip income:
The Big Beautiful Bill that was recently passed, will allow tipped workers, like waiters and bartenders, who earn less than $150,000 per year, or $300,000 if married filing joint, to deduct up to $25,000 of their tips, from federal taxable income in tax years starting in 2025 thru 2028. 

You are doing a great job lowering your taxable income by contributing 20% of your pre-tax earnings to your 401(k) and $2,300 to your HSA. This is not only preparing you for the future but also giving you tax breaks right now by reducing what’s considered taxable income. . Your long-term capital gains of $24,480.74 will be taxed at 0%, 15%, or 20%, depending on your adjusted income, which is already lowered due to your contributions. Also, once your student loans start accruing interest, you might qualify to take the deduction of up to $2,500 for student loan interest.

Some potential options for lowering capital gains for this year are:

• Put More Into Your 401(k):
  In 2025, the maximum amount you can contribute to a 401(k) plan is $23,500. If you are age 50 or older, you can make an additional catch-up contribution of $7,500, bringing your total potential contribution to $31,000. For those aged 60-63, there is a special catch-up provision allowing for a $11,250 contribution on top of the base limit, potentially reaching a total of $34,750Adding more can lower your adjusted income, which might reduce the tax rate on your capital gains.
• Sell Investments With Losses:
  If you own investments that have dropped in value, selling them can offset your capital gains directly. It’s called tax-loss harvesting, and it’s a great way to reduce what you owe.

For more information see these additional resources:

• IRS: Tip recordkeeping and reporting 
• Pub 550: Capital Gains Tax Info IRS 
• IRS Contribution Limits 
• Capital Gains and Losses - TurboTax Tax Tips & Videos - Intuit 
• Tax Loss Harvesting: A Comprehensive Guide How It Works 

Please feel free to reach backout with any additional questions or concerns you might have!

 

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Thank you so much for your detailed answer! It helps me to see where I can continue taking action to reduce my taxes owed at the end of this year. I appreciate you taking the time and sharing your knowledge with me.

Thank you for joining us for the event today.

Hi Terri Lynn,

 

I would like to see about discussing some of the information that you provided me in more detail and looking at some different ways that I can lower my taxes for 2025. Are you able to do that? If so, how does that work? Is there a fee? If so, how much? Do you have a way for me to contact you directly?

 

I'm looking forward to hearing from you soon.

 

Suzanne

 

 

The community board you are posting on is for general assistance.  You can post general questions here if you'd like and we'll do our best to assist you.  If you are looking for more specific assistance, TurboTax does have tax pros in certain locations that are available to assist with tax return preparation.  Please see this link for more details.

 

@Misspag