2023 – 09/12 – Investment swings: What’s the tax impact?

Have your investments fluctuated wildly this year? You may have already recognized gains and losses. But nothing is decided tax-wise until all the gains and losses from 2023 trades are tallied up at year end. If you’ve had swings in the value of a tax-favored 401(k), traditional IRA, Roth IRA or SEP, there are no current taxes. These changes affect the account value but have no tax impact until you take withdrawals. At that point, your account balance(s) will affect your taxes. (Qualified Roth withdrawals after age 59½ are tax-free.) With taxable accounts, the cumulative gains and losses from trades during the year are what matter. Unrealized gains and losses don’t affect your tax bill. 

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