We didn’t cash in any stock or appreciated assets in 2021, which kept our income pretty low. We just had some dividend income and I earned some pay from board work. Mostly, we just lived off of savings.
Our accountant pointed out that married couples with income less than $80K pay 0% long-term capital gains tax. I hadn’t paid attention to that before, so we exploited that wrinkle in the tax code by selling a big traunch of appreciated stock on 12/29.
Here’s the long-term capital gains tax table …
We saved about $12K from the move, which won’t change our FIRE lifestyle, but will pay a few years of accountant bills. I love it when she than ‘earns her keep’ on our financial team with good tax advice.
It was critical to get it in before the ball dropped on New Years Eve as 2021 may be the only time I can take advantage of a low-income year to get the 0% capital gains opportunity. My full MegaCorp pension kicks in on 2/1 and we have some stock option sales coming up later in 2022.
Any good year end tax strategies you took advantage of in 2021?
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