Capital Loss Carryover + W2 Job Question

[vrobert]

Hello!

I want best manage sizable carryover losses $80k+ and had a question.

I've had carryover losses from stocks for a few years now and I work a W2 job for awhile. My W2 job withholds the most federal tax so I typically get a refund each year. Is it possible to use carryover loss toward paying W2 State/Federal taxes the following year for a W2 job? Or, can I change my W2 withholding the next year and take from the capital loss carryover to pay taxes this way?

I'm looking for other ways to maximize capital loss carryover (not just do 3k deduction every year) if I'm not planning to do investing anymore. (Yes I know I can write off gains on a home but also not planning the same). And 3k is 3k a year but rather have more up front if possible 🙂

Thank you!

[Bsch4477]

There is no way to “maximize” the capital loss. If you have no capital gains $3,000 will be deducted from your income each year. Of course that decreases your tax liability and you can withhold less from your W-2 to account for that. 

[Opus 17]

Capital losses are taken against capital gains, such as the sale of stocks or property that has increased in value.  If you have investments that have increased in value, you can sell them to realize the gain, then re-buy them or similar investments so that you can set a new higher basis that will reduce your gains in the future.  (But, if you sell and then re-buy the same or similar investments, you must wait at least 31 days!)

Your refund is irrelevant.  Even your tax liability is irrelevant.  If you had $10,000 of withholding and you get a $1000 refund, your tax liability to the IRS was $9000.  If you had $5000 of withholding and owed another $4000, your liability is still $9000.  And that has nothing to do with the gains and losses carryover.