topic This year very little income, next year expecting full year of employment income. Tax tips to take advantage? in Get your taxes done using TurboTax

This year very little income, next year expecting full year of employment income. Tax tips to take advantage?

PickledPizza — Fri, 27 Nov 2020 23:14:53 GMT

I am starting a well-paying job in December but have had very little income so far this year. So next year will be at a much higher tax rate. I'm considering taking advantage of this by doing an IRA for this year.

Any suggestions for other ways to take advantage of this low income year tax-wise? I tried googling but couldn't find anything specific to my situation, and yet I know that the lower tax rate this year could be useful.

Re: This year very little income, next year expecting full year of employment income. Tax tips to take advantage?

Bsch4477 — Fri, 27 Nov 2020 23:59:31 GMT

If your tax bracket is low enough and you have gains in stock assets you could sell them and the gains would not be taxed. If you wanted to stay in the market you would sell your holdings and just buy them back. Wash sale rules do not apply to stock sold at a gain.

Re: This year very little income, next year expecting full year of employment income. Tax tips to take advantage?

Critter-3 — Sat, 28 Nov 2020 00:31:32 GMT

If you have an IRA you may want to convert some to a Roth.

Re: This year very little income, next year expecting full year of employment income. Tax tips to take advantage?

Anonymous — Sat, 28 Nov 2020 06:02:55 GMT

if you itemize deductions defer as much as possible to next year (provided there's no penalty for doing so).

Re: This year very little income, next year expecting full year of employment income. Tax tips to take advantage?

PickledPizza — Sat, 28 Nov 2020 18:12:17 GMT

Those are all good ideas. I do have some stock gains so that's worth thinking about. I have usually done standard deduction, but I'll look into whether I could benefit from itemizing next year. And I do have an IRA, so I'm considering the Roth.

So likely I'll sell some stock to take the gains now and convert to Roth.

Thanks all for your feedback, it helps to know I'm not missing anything big and to have a few good areas to focus on for taking advantage of low income this year.