Tis’ the Season…for Capital Gains

Due to strong market performance, realized capital gains from mutual funds, your ACM managed portfolios and any other investments you have will be larger this year.  This may impact your taxable income for 2021.

We mentioned a couple of weeks ago in our year-end planning webinar that realized capital gains in any taxable investment accounts (not IRA or retirement accounts) are always the “wildcard” in projecting your taxable income for the year.  Other sources of income, like salaries, pensions, social security, required minimum distributions from IRAs and even dividends, interest and rental income are trackable and predictable.  When it comes to dividends and interest, for example, you should be able to locate the amount received “year-to-date” right on the first couple of pages of your monthly account statement.

Your monthly statement may report that amount of securities bought and sold for the most recent month and cumulatively year-do-date, but it may not necessarily report the realized capital gains or losses generated from the trading activity in your account.

Here are couple of action items to consider:

• If you are unsure of what your 2021 taxable income will be and the potential income tax implications, reach out to your accountant or tax preparer to ensure you will avoid any interest or penalties for underpayment or under withholding.
• Reach out to your ACM Wealth Advisor for any information you need to provide to your accountant.
• Make sure to do the same for any other investments you have.
• Prepare in advance to have enough cash to pay any taxes due for 2021 on April 15, 2022 when you either file or extend your 2021 return and the first estimated tax payment for 2022 is due.

If you have questions or need information for your taxable (not retirement or IRA) accounts managed by ACM, then reach out to your Wealth Advisor who can provide you with the information you may need.

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