How investors can save on their 2016 tax bill

Stocks hit repeated record highs this year, and many investors may have sold to lock in their profits. But those who invested outside of a tax-sheltered retirement account are likely to face a tax bill on the profits. If that’s you, taking a quick look at your portfolio before Dec. 31 could help you avoid a big hit in April.

If you had an investment windfall in 2016, those gains will be taxed at a rate up to 20 percent or more, depending on how long you held the investment. To make up for a gain, consider selling stocks or mutual funds that went down in value and bringing your total investment income close to zero. If you end up with more losses than gains, you can deduct up to $3,000 from your income.  

Another option, if you regularly give to charity, is to donate appreciated stock instead of cash -- you’ll get a double tax benefit that way.  

Watch the video above to learn more.