This thread I started as I am once again faced with this drawdown from my investments. I feel I am of course planning for this as one should. But as an investor of years, I know it is inevitable. The tax man cometh, and the tax man take'eth away. This market during the lockdown has produced many many new retail investors. And many of the have really enjoyed the "great bounce back" with many gains. Now, July is around the corner and that is when I will be triggering tax defensive strategy against my gains which have been quite nice. But I am of course knowing that short term capital gains will need coverage from the tax bills that will be due by April 2021. Some simple methods of course can be used. Such as a significant increase in withholdings on earned income. This is easy, but keep in mind too much of a percentage of withholdings can raise the IRS eyebrow at you, but that is normal for them and could cause slight delays in processing. Another method is increase your 401k withholdings to put more of your income into the tax free zone thereby dropping your taxable earned income, to offset your overall taxable income. But for you new traders that are all smiles with your recent gains, be aware,... Everytime you win shorts in the markets, the tax man puts on a wry grin and extends the heavy hand for their portion. And they will get it from you, and it may be more than you are realizing.
Well, at least Bernie is gone. That guy was going to harm more people than he thought with his stock trading tax plan.
