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Yahoo
5 days ago
- Business
- Yahoo
6 Tax Moves To Make During the Summer, According to Fidelity
It's tempting to push tax planning to the bottom of your to-do list, especially in the summer. But according to Fidelity, midyear is one of the best times to make small tax tweaks that can save you money when April rolls around. Find Out: Read More: So if you've been coasting since filing your 2024 return, now's the time to check in and get proactive. Here are six tax moves to make before the year slips away. Update Your W-4 Withholdings Most people fill out a W-4 when they start a job and never look at it again. But a lot can change after getting that new job, including having a baby, getting a side hustle, or buying a home. All of these can affect how much tax you should (or shouldn't) have withheld from your paycheck. If you owed a big chunk or got a huge refund last year, that's another sign your W-4 might need adjusting. Here's how to know if it's time for a refresh: You had a child or added dependents. You might qualify for the Child Tax Credit (up to $2,000 per child), or the nonrefundable $500 Credit for Other Dependents. You picked up extra income. A second job or side hustle usually means no tax is withheld unless you do it yourself. You might want to increase withholding at your main job to make up the difference. You plan to itemize this year. If you're claiming deductions beyond the standard, you can reflect that on your W-4 to reduce how much is taken out now. You can use the IRS's Tax Withholding Estimator to run the numbers. Then just submit a new W-4 to your human resources (HR) department. Consider This: Harvest Tax Losses If you have some losing investments in your portfolio, you might be able to use those losses to offset gains and shrink your tax bill. This is known as tax-loss harvesting, which is when you sell underperforming investments to lock in the loss. You can then use that loss to offset gains from other investments or deduct up to $3,000 of ordinary income. Just watch out for the wash-sale rule: If you repurchase a 'substantially identical' investment within 30 days before or after selling it, the IRS won't let you claim the loss. Get Organized if You Plan to Itemize The standard deduction for 2024 is $15,000 for singles and $30,000 for married couples. But if you had big expenses this year, you might want to itemize instead. If that's the case, start tracking and organizing receipts now. Fidelity also recommends bunching multiple years' worth of charitable donations into one year so you can itemize this year and take the standard deduction next. Max Out Pre-Tax Accounts If you haven't been contributing to your pre-tax accounts, summer is a good time to start catching up. Here's what you can still contribute for 2025: 401(k) and 403(b) plans: Up to $23,500 (plus $7,500 catch-up if 50 and over) Traditional IRA: Up to $7,000 (plus $1,000 catch-up if 50 and over) Health savings account (HSA): Up to $4,300 for individuals or $8,550 for families (plus $1,000 catch-up if 55 and over) Prep for Required Minimum Distributions (RMDs) If you turned 73 this year, you'll have to start taking money out of your traditional retirement accounts, whether you want to or not. These RMDs are taxable, and skipping them can lead to penalties (25%, reduced to 10% if corrected in time). So if you'll be approaching 73, make a plan now to avoid last-minute scrambling in December. Think About a Roth Conversion A Roth conversion allows you to convert pre-tax traditional IRA funds to a Roth IRA. You'll pay taxes upfront but enjoy tax-free withdrawals and no RMDs later. It's also a smart way to pass tax-free assets on to your heirs. If your income is too high to contribute to a Roth IRA directly, you might consider a backdoor Roth IRA strategy. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 The 5 Car Brands Named the Least Reliable of 2025 8 Common Mistakes Retirees Make With Their Social Security Checks This article originally appeared on 6 Tax Moves To Make During the Summer, According to Fidelity Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-07-2025
- Business
- Yahoo
3 Ways Crypto Can Change How You Get Approved for Your Next Home
In the digital age, there are lots of factors to consider when buying a house, with one of them being relatively new and uncharted: cryptocurrencies. Bitcoin and other crypto have become highly popular over the last few years, as well as proven themselves to be highly volatile at the same time. So, if you have a significant amount of your finances invested in crypto and want to buy a house, how will it change your chances of getting approved? Check Out: Learn More: GOBankingRates asked several experts to weigh in on ways crypto can change approval odds for your next home. Here's what they had to say: 'This directive creates the rails for mainstream financial acceptance of crypto assets,' said Jess Houlgrave, CEO of digital wallet infrastructure provider Reown. 'For the first time, your bitcoin or stablecoin holdings could help you qualify for a mortgage — that's not just validation, it's infrastructure becoming reality. But the real impact goes beyond individual mortgages.' Houlgrave went on to explain that when government-sponsored enterprises start factoring crypto into lending decisions, it forces every part of the mortgage ecosystem to build the tools and processes needed to evaluate digital assets. I Asked ChatGPT To Explain Crypto Like I'm 12: When it comes to how crypto can be assessed within the scope of applying for a mortgage, the dos and don'ts are still unclear — as are laws, regulations and oversight due to the currency still being relatively new to so many lenders and buyers. 'We still don't know what the guidelines on this will be,' shared Jennifer Beeston, mortgage lender and housing/real estate expert. 'Will they treat all crypto coins the same? We don't know what the rules are going to be yet, so it's hard to understand risk. That's what Fannie and Feddie are doing. They are trying to figure out how to do this in a safe way while helping people get homes.' While there still remains a lot to be seen with how cryptocurrencies will operate in the future, they have opened pathways to homeownership that previously did not exist for a number of potential single-family mortgages, according to Joe Lackner, the founder of Coin Interest Rate. 'About 21% of U.S. adults — roughly 55 million people — own crypto, and around 10% of them hold over $100,000,' Lackner explained. 'Until now, these assets often had to be cashed out, often at the wrong time and with significant tax consequences, to count toward a mortgage application.' 'Stablecoins like USDC and USDT may be the ideal asset here,' Lackner went on to say. 'Unlike bitcoin or ethereum, there's significantly less volatility. That makes them more practical as proof-of-reserves when applying for a mortgage — borrowers aren't at risk of losing loan eligibility because of a sudden price drop.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 The New Retirement Problem Boomers Are Facing The 10 Most Reliable SUVs of 2025 This article originally appeared on 3 Ways Crypto Can Change How You Get Approved for Your Next Home
