Annex Wealth Management 2022 Year-End Tax Guide

Tax laws seem to change each year, which is why Annex Wealth Management produces its Year-End Tax Guide. This year, some taxpayers will experience changes in tax law regarding deductions. Make sure to review how – or if – your tax situation has changed.

As always, let us know if you need any assistance in implementing or updating your tax plan.

2022 TAX TIPS →

Thursday brought the best returns in seven years, with inflation continuing a downward trajectory. Annex Wealth Management’s Dave Spano and Jason Cooper discuss.

Last week we asked about your tax strategy for 2022 and whether you’ve considered re-evaluating. This question arose from the results of a recent survey of tax professionals; it was found that most of them are re-evaluating tax strategy for 2022 with potential legislation in mind or actively implementing changes in response to legislative developments.

Here are the results of our survey: (Percentages are based on the number of respondents)

  • Yes – 44%
  • Unsure – 21%
  • No – 36%

2022 tax planning considerations include a variety of internal and external factors, including economic volatility, supply chain issues, remote work, inflation, and COVID-19.

If you’re considering re-valuating your tax strategy, but aren’t sure where to start, Annex Wealth Management is here to help you start that conversation.

You can set up a phone call with a team member by following the link below!



Capital Gain/Loss Planning: Capital Gains Distributions; Tax Loss Harvesting

In this week’s MoneyDo, we encourage you to take part in a key component of year-end wealth management – evaluating capital gains and losses.  

After the volatile market we’ve experienced this year, you may discover your holdings are in a different position than they were just a year ago. Despite the potential complexities, evaluating gains and losses should be part of your end-of-year MoneyDos.  

The gain and loss evaluation process has two critical components:  

  • Considering tax implications as you get ready to file taxes  
  • Reviewing the risk you are taking in your portfolio and considering adjustments, if needed  

When considering taxes, keep in mind that long-term capital gains are taxed differently than other types of income. Depending on your situation, long-term capital gains may be taxed at 0%, 15%, or 20%.  

For lower-income taxpayers, it’s possible to have some or all of these gains fall into the 0% capital gains tax rate. For higher income taxpayers, your gains may be taxed at the 15% or 20% rates. Additionally, higher income taxpayers may be faced with a 3.8% surtax on investment income.  

The end of the year is a great time to review what assets you hold and look at rebalancing your portfolio. When you do, consider your mix of assets, and determine if they’re in line with your risk tolerance. It’s important to note that if you’re on Medicare, you should be aware of increasing your income too much. There are certain income thresholds that can cause higher monthly Medicare premiums for you in a future year.  

It’s also important to look at the holding period of assets you’re selling. If you’re realizing gains on holdings you have owned for 365 days or less, the sale would be considered short-term. Short-term capital gains rates are generally less favorable, as they mirror that of your current ordinary income rates.  

For many newer investors, it takes some time to understand why or how a realized loss could be a tool in your financial toolbox. However, a tax loss can sometimes be used to reduce your tax liability. If your portfolio has realized gains, that could potentially bring you into a higher tax bracket. Realizing a loss can potentially reduce your tax bill.  

Things to consider before realizing losses:  

  • Your losses can offset other capital gains, to the extent you have them. Beyond that, up to $3,000 of losses can be used to offset ordinary income. Any remaining losses will generally be carried forward for use in future years.  
  • Ask yourself this: Do you already have suspended losses which you are carrying forward on your tax return? If so, you may not receive additional tax savings by realizing more losses now.  
  • Selling a security with a loss and then immediately buying it back may create an unintended consequence. You would need to wait 31 days before buying the security back. If you don’t, the “wash sale” rule kicks in, preventing you from realizing and benefiting from the tax loss created by the initial sale.  
  • Make sure to consider if you would leave the funds in cash after realizing a loss, or if you would be reinvesting the proceeds into a different type of security.  

If you’re worried about the tax implications of realizing gains and/or losses, be sure to review your projected 2022 income before executing any sales. Don’t hesitate to get in touch with us here at Annex Wealth Management. We stand ready to help in any way we can. 


In this week’s Ask Annex, Wealth Managers Sarah Kyle and Randy Winkler, CFP®, field questions about converting insurance policies, paying down debt, and what type of accounts to consider opening for a newborn.

Do you have a question for Annex Wealth Management? Drop it here: