How investors can navigate this tax season's many changes
Bad news for investors this filing season: Under the Tax Cuts and Jobs Act of 2017, itemized deductions are gone this past tax year, meaning investment expenses are no longer deductible.
The good news for investors? They can get a lower tax rate on capital gains. The long-term capital gains tax rates for 2018 under the new tax law are zero, 15 percent and 20 percent, depending on your income.
In addition, investors with qualified business income also get a 20 percent pass-through, meaning they get to cut 20 percent from their income before filing taxes. It helps them keep pace with big corporations, which got a tax rate that came down from 35 percent to 21 percent.
"It's complicated because it was put in place at the last minute, but it's a great tool for investors to be able to use," Dan Geltrude, certified public accountant at Geltrude & Co. in New Jersey, told CBSN.
CBS MoneyWatch contributor Ray Martin says taxpayers with a lot of investment transactions to report may find that completing the new Schedule D, Capital Gains and Losses can be a pain. The new cost-basis reporting rules require you to categorize this information, making this even more complicated. Hiring a tax pro just to complete this schedule can be worth the money, Martin says.
More information is available here.
