A Taxable Brokerage Account is Good

Jason Demland

June 1, 2023

A “Non-Qualified” Brokerage Account is Good

Tax filing season has come and gone. Many of you had taxable accounts with me that went down in value in 2022. It was a rough year for the stock market.

The S&P 500 had a return of -19.64% in 2022. Including dividend reinvestment it was still -18.32%. Years like this aren’t uncommon, but they’re no fun.

The bright side of this meant some tax planning opportunities. In a taxable brokerage we were able to do something called tax-loss harvesting, which is a fancy way to say that we sold positions that were losing and replaced them with similar (but not the same) funds. We were able to realize losses for taxes without divesting the money.

Capital losses can be used to offset capital gains which can have a great impact on your total taxable income. If your total losses are greater than your total gains up to $3000.00 of net losses can be used to offset ordinary income.

If you have more than $3000.00 in net losses you can carry forward those losses to future tax years! It’s important to have updated tax documentation to make the most of these losses to keep your taxes as low as possible.

If you’re sitting on too much cash in bank accounts, this is just one reason a taxable investment account could be a good alternative.

Post Views: 444

Subscribe to my newsletter

Join my newsletter and get biblical financial inspiration.

Demland Wealth LLC (“DW”) is a registered investment advisor offering advisory services in the State[s] of OH & IN and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training.

This communication is for informational purposes only and is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon as the sole factor in an investment making decision.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made will be profitable or equal the performance noted in this publication.

The information herein is provided “AS IS” and without warranties of any kind either express or implied. To the fullest extent permissible pursuant to applicable laws, Demland Wealth LLC (referred to as “DW”) disclaims all warranties, express or implied, including, but not limited to, implied warranties of merchantability, non-infringement, and suitability for a particular purpose.

All opinions and estimates constitute DW’s judgement as of the date of this communication and are subject to change without notice. DW does not warrant that the information will be free from error. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall DW be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the information provided herein, even if DW or a DW authorized representative has been advised of the possibility of such damages. Information contained herein should not be considered a solicitation to buy, an offer to sell, or a recommendation of any security in any jurisdiction where such offer, solicitation, or recommendation would be unlawful or unauthorized.