It is about that time of year again; April 15th which is considered D-Day for those tax procrastinators. April 15th is the deadline to finally file your taxes without a penalty and some of you have waited this long to file quite possibly because you owe taxes this year. However, did you know that there are some advantages out there that you might not know about especially for you investors?
Let me explain; if you are an individual investor you always have an advantage over those who don't because you can increase your net worth without having to pay taxes on increasing value of your investments. Say for instance that you own stocks, some bonds, and other various instruments that diversify your portfolio. As long as you hold onto those instruments you will not owe taxes on any of your capital gains. This year so far the stocks that I own have increased by 20%; not bad! As long as I hold onto those instruments I will not have to pay taxes on those capital gains. At the same time I increase my net worth and with that increase it affords me some other advantages in leverage and the acquiring of other worthwhile investments. All the while this is happening I still do not have to pay taxes and in fact reduce my tax burden if I buy real estate as an investment. The downside obviously is that if you hold onto your instruments and they decrease in value that can be a problem. Yet, you can write off those losses and reduce your tax burden which in turn allows you to manage the risk and loss respectively.
Of course there are more advantages but it would be best that you contact your tax consultant or accountant to get the straight answers about taxes. This information that I provided is designed to get you off the sidelines and back into the game. Right now there is a lot of money on the sidelines and it is not making the money for you that it could if you got back into the investment game and taking managed risk. The idea of using the tax code to your advantage is just one way for you to manage that risk. Also remember there are a lot of undervalued companies out there that are strong financially with sound management and very little debt so why not jump back in? Just remember today a couple of weeks before the tax deadline you can still reduce your tax burden by buying stocks, bonds, futures, etc. When you do buy; some of you probably use a broker and you will pay a fee for your purchases. This in turn results in a loss if your stocks don't immediately produce a gain. Do not fret about this you still have reduced your tax burden because you can write the fees off as a loss! Don't take my word for it just make sure you consult your tax accountant for the straight skinny on taxes. Is this a great country or what!?
About the Author:
For more information about this article or others contact the author directly at
www.christopherstudios.net or at
photoscott6@yahoo.com. Dr. Duane C. Scott is the owner and President of Christopher & Scott LLC a venture capitalist firm.
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313
Date Published :
Apr 7 2009