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What Is Tax-Loss Harvesting?: A Beginner’s Guide

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Tax time is here again, and with it, the sinking feeling in your stomach that comes with determining how much you might owe the federal government.

Americans have many conflicted feelings about paying their taxes, but there is no denying that working through all the paperwork each year can produce quite a headache.

While it’s never fun to reflect on your financial losses, doing so can actually be quite helpful during this busy time. Investment losses can be used in a process known as tax-loss harvesting. It is a financially savvy way to help lower your tax burden and cool some of the sting of your financial loss over the course of the year.

How does tax-loss harvesting work and is it something you should consider this year? Read on and we’ll walk you through what you need to know.

What Is Tax-Loss Harvesting?

Looking for a way to lower your tax bill? There’s no better way than tax-loss harvesting, which can help to shave off up to $3,000 from what you owe each year. That’s certainly not a total to turn your nose at.

The process essentially requires you to cut your tax bill by selling current investments at a loss. Have a few stocks that haven’t paid off or other kinds of investments that have taken a dent in your financial outlook?

Selling them at their current lows could actually help to put some money back into your pocket instead of the federal government’s. When you sell low, these losses can be used to offset the capital gains tax that you might be taking in from other kinds of investments.

Making the conscious decision to sell at a loss, while it may sound counter-intuitive, might actually help you save money in the short term.

Why Consider Tax-Loss Harvesting?

There are many benefits and reasons to consider tax-loss harvesting. The main benefit, as we mentioned above, is to help lower the amount you’ll actually owe in taxes for your more lucrative investments.

One advantage of tax-loss harvesting as a financial strategy? You don’t have to be a high roller to take advantage. Any kind of portfolio with gains and losses can implement this strategy, even if the total value of your investments is relatively small.

While a small amount might not be worth making the sale for, the principles of the strategy stay true no matter what financial bracket you’re in.

While it makes sense to think about the money saved as going to diminishing your capital gains tax, this isn’t the only area where you can save money. Even if you didn’t make any cash on your investments this year, you can actually use your harvested losses to deduct from what you owe on your general income tax.

Tax-loss harvesting isn’t an official financial move recognized by the IRS, but it’s perfectly legal to do. Many financial advisors might recommend you take on this strategy during tax time. You can read more about the benefits of this move at https://bogartwealth.com/services/tax-optimization/.

Factors to Keep in Mind

If you’re strongly considering selling off some investment losses, there are a number of things you’ll need to keep in mind. While this is a smart financial strategy, it is also to make a mistake if you don’t know what you’re doing.

The major thing you’ll want to keep your eye on: it’s already too late to do it for this calendar year. In order to count for your taxes, the sale that you’re looking to do needs to occur prior to December 31st.

There are some tax tasks that can be done all the way up to the tax deadline, but this is not one of them. If you want to take advantage of tax-loss harvesting, it needs to be done prior to the end of the calendar year.

You can start keeping your eye on your taxes for this upcoming year as your investments move, but it is too late to make changes for the 2021 tax year.

What else do you need to keep in mind?

A Warning for Those in Lower Tax Brackets

You need to remember that while this strategy will work for people in lower tax brackets, you’ll need to consider if it is worth the money saved. Investments that you have at a loss now might come back up in the future.

The potential profit from these investments might be more than what you’re able to save on your taxes through this strategy.

The lower your tax bracket, the fewer savings you’ll make going this route. If you calculate how much you might be able to save and find that you have a highlier likelihood of making that money by waiting for your investments out, that might end up being the better choice.

Harder for Index Fund Investors

If you make most of your investments in index funds as opposed to individual stocks, this is going to be a trickier move to make. It’s less easy to sell off your stake in these types of funds when you need to save some cash at the end of the year.

You’ll find it much easier to sell off a few individual stocks and keep your funds on hold for the future.

Benefits of Tax-Loss Harvesting

If you’re looking for a way to save on your taxes this season, learning about tax-loss harvesting might provide just what you’re looking for. There are many reasons to consider this particular financial strategy, with the most important ones outlined above.

Need more personal finance advice? Keep scrolling our blog for more.

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A Detailed Overview of the Litigation Process

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A Detailed Overview of the Litigation Process

Litigation is the formal legal process used to resolve disputes between individuals, businesses, or other entities. This process plays a crucial role in ensuring justice in cases such as personal injury claims, contract disputes, and divorce proceedings.

If you are interested in Litigation Crowdfunding, check this read Litigation Crowdfunding: Do’s and Don’ts — 8 Tips to Maximize Success Civil Litigation and Court Jurisdiction

Civil litigation can occur in either state or federal courts, depending on the nature of the dispute. In the United States, the Federal Rules of Civil Procedure govern cases in federal courts, aiming to provide a just, speedy, and cost-effective resolution for all involved parties.

The Litigation Process

While the specifics of litigation can vary by jurisdiction, the general process follows these key steps:

  1. Filing a Complaint

The process begins when the plaintiff formally files a claim with the court, outlining the dispute and the legal basis for their case. The court then issues paperwork to notify the defendant of the lawsuit.

  1. Pre-Trial Motions and Discovery

Both parties may file motions requesting the judge to make specific legal rulings. Common motions include: Motion to Compel Discovery – A request for the court to order the opposing party to provide important information; Motion for Summary Judgment – A request to resolve the case without a full trial if the facts are undisputed and one party is entitled to win as a matter of law.

The discovery phase follows, where both sides gather evidence, exchange documents, and take depositions to build their cases.

  1. Trial Proceedings

If the case is not dismissed or settled, it proceeds to trial. During the trial:

Both sides present arguments and evidence.

Witnesses may be called for testimony and cross-examined.

The plaintiff typically bears the burden of proving their claims, such as demonstrating negligence in a personal injury case.

  1. Verdict and Judgment

A judge or jury determines the outcome of the case. If the plaintiff seeks monetary damages exceeding $20, the U.S. Constitution guarantees the right to a jury trial unless waived by both parties. If non-monetary relief, such as an injunction, is sought, a judge usually decides the case.

  1. Appeals and Enforcement

If a party is dissatisfied with the ruling, they can appeal to a higher court, seeking a review of the decision. If the appeal is unsuccessful, the judgment is enforced through legal mechanisms.

Arbitration: An Alternative to Litigation

For those looking to avoid lengthy and costly court battles, arbitration serves as an alternative dispute resolution method. Instead of going to trial, an impartial arbitrator reviews the case and makes a binding decision, often leading to a faster and more cost-effective resolution.

The Problem of Frivolous Litigation

While the litigation system is designed to resolve legitimate disputes, it has become burdened by frivolous lawsuits—cases filed with little legal merit, often as part of class actions or mass tort claims aimed at financial gain. These lawsuits can take years to resolve, drain judicial resources, and impose significant costs on defendants. Addressing this issue is critical to maintaining an efficient and fair legal system.

Litigation remains a fundamental mechanism for resolving disputes and upholding legal rights. Understanding the process, alternatives like arbitration, and the challenges posed by frivolous litigation can help individuals and businesses navigate legal conflicts effectively. Whether pursuing or defending a lawsuit, being informed is key to achieving the best possible outcome.

Resource:https://instituteforlegalreform.com/blog/what-is-litigation/

Read More: jacqulyn elizabeth hanley

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Exploring the New Age of Digital Law for Barristers

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Exploring the New Age of Digital Law for Barristers

Legal technology advancements are significantly transforming the way barristers work, creating brand-new opportunities for legal professionals while reshaping traditional practices.

Barrister Emily Windsor shares her insights into how these innovations are influencing the legal landscape, from streamlining case management to enhancing research capabilities.

She also explains why adapting to these technological changes is crucial for modern practitioners who want to remain efficient, competitive, and prepared for the future of legal practice.

Efficiency, Accessibility, and Transformation

Emily Windsor understands the importance of digitisation in democratising legal knowledge and creating a more flexible legal profession.

Reflecting on her role in producing and updating leading agricultural law texts, she acknowledges the impact of moving legal resources online: “Since books have been incorporated into digital platforms, practitioners who would not have dreamt of purchasing a specialist text can now access them at the click of a button,” she notes.

Platforms like the Westlaw online legal database have effectively removed barriers to information, ensuring that specialised legal expertise is widely available to those who need it.

The influence of technology in the legal sphere extends past knowledge dissemination, fundamentally altering advocacy through the accelerated digitalisation of court processes, especially during COVID-19.

Though Emily Windsor is aware of the constraints of remote hearings, particularly in assessing witness demeanor, she also sees the benefits of technological flexibility for lawyers and clients alike.

Furthermore, technology has introduced new possibilities for practitioners to balance professional demands with personal responsibilities. Emily Windsor points out how online access to legal resources and virtual proceedings has made the Bar more accessible, particularly for women and individuals managing family commitments.

The modern barrister must embrace technological tools not only as a matter of convenience but as a means to remain efficient and accessible.

Remote Hearings

The pandemic accelerated the adoption of remote hearings, transforming them from an occasional convenience to a standard practice. Emily Windsor’s observations reinforce how this shift has had lasting effects on the profession. Virtual hearings for procedural matters save time and resources that would otherwise be spent on travel and waiting at court.

This transition to remote proceedings has particular benefits for certain types of legal work. Administrative hearings, case management, and applications without witness testimony can often be handled more efficiently through virtual means. The technology allows barristers to serve more clients in less time, potentially reducing costs for clients while increasing access to legal services.

Work-Life Balance and Diversity

Perhaps one of the most significant impacts of legal technology has been its effect on work-life balance within the profession. Emily Windsor notes that technology has made the Bar more accessible to those with family commitments, particularly women. The ability to access resources remotely and participate in hearings from home or office locations provides flexibility that was previously unavailable.

This technological shift may help address long-standing diversity issues within the legal profession, since by removing some of the rigid structural barriers that have historically made it difficult for certain groups to succeed at the Bar, technology creates pathways for a more diverse and representative legal profession.

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The Evolution of Automotive Tools: Transforming the Mechanic’s Workshop

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The Evolution of Automotive Tools

“Safety should always be the top priority when it comes to driving,” emphasizes Andrew S. Kryder, Esq., a leading Chicago car accident lawyer. Addressing the evolution of automotive tools, he notes that advancements in technology have significantly transformed the mechanic’s workshop, enhancing efficiency and safety for both drivers and technicians. From diagnostic scanners and digital torque wrenches to advanced tire balancing machines, modern tools offer precision and speed unprecedented in the industry. These innovations not only streamline the repair process but also contribute to ensuring that vehicles are in optimal condition, thus promoting safer roadways for everyone.

Advanced Diagnostic Tools

Gone are the days when mechanics had to physically inspect every part of a vehicle to identify issues. With advanced diagnostic tools, technicians can now quickly and accurately diagnose problems, saving time and reducing human error. These tools use computer systems and sensors to scan a vehicle’s performance, detect abnormalities, and provide data for efficient repairs.

Precision Torque Wrenches

Torque wrenches have been crucial in automotive repair for decades, but today’s digital torque wrenches offer enhanced precision and accuracy. These tools allow technicians to calibrate the amount of pressure applied when tightening bolts, ensuring that they are tightened to the exact specifications recommended by manufacturers. This not only improves the quality of repairs but also prevents potential hazards caused by over or under-tightening bolts.

Advanced Tire Balancing Machines

Tires are a critical component of safe driving, and maintaining them in optimal condition is crucial for road safety. With advanced tire balancing machines, technicians can accurately balance tires to ensure even weight distribution and prevent issues like uneven wear or vibrations while driving. This not only promotes a smoother ride but also minimizes the risk of accidents caused by tire failures.

Improved Safety Measures

In addition to advanced tools for repair and maintenance, advancements in technology have also led to improved safety measures in the mechanic’s workshop. For example, some equipment now comes with safety features like automatic shut-off switches to prevent accidents, while others have ergonomic designs to reduce strain on the technician’s body.

That Means …

The evolution of automotive tools has significantly transformed the mechanic’s workshop, improving efficiency and safety for both drivers and technicians. With these advancements, we can expect even more precise and efficient repairs in the future, contributing to safer roads for all.

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