Don't Mess With Taxes

Sure it's the season to be jolly, but that's sometimes hard when your portfolio has taken a beating.

But you might be a bit more joyful when you file your tax return next year if you take advantage of those tax losses by the end of the year.

By selling stocks or other capital assets that have lost value, you can use those amounts to offset any capital gains you might have made this tax year on more successful ventures.

And taking advantage of tax loss harvesting is today's Weekly Tax Tip.

But, you say, when you followed year-end investment moves advice and readjusted your portfolio, there weren't any gains to be found.

No worries. You still can sell those bad buys if they don't fit into your overall, long-term investment strategy and then use up to $3,000 in losses to reduce your ordinary income.

If you have more than three grand in losses, first hire a new investment adviser. Then remember that you can carry forward the excess loss amount into future tax years.

To take advantage of tax losses during the 2012 tax return filing season, however, you must make your investment moves by Dec. 31, or by Dec. 30, 2011, since the 31st this year falls on Saturday.

Be sure to check with your broker to make sure he'll be working that day.

Or go ahead and sell those losers a bit sooner so that you don't miss the tax loss harvesting deadline.

You also might find these items of interest:

• Year-end tax moves (2011)
• Year-end giving moves (2011)
• Year-end tax moves for small businesses (2011)