If You Need Cash Now, Don’t Ignore the Tax Bill That Could Come Later
Friday, April 24, 2020
News & Press
The coronavirus pandemic is wreaking havoc on the U.S. economy, with 26 million workers newly unemployed and plenty more people jolted by declines in their retirement and brokerage accounts.
Americans at all economic levels are looking to free up cash. As they do, they should pay attention to taxes, which can determine which strategy makes the most sense.
For example, one strapped family could find that taking money out of a child’s 529 education-savings plan has a lower total tax cost than withdrawing from their IRA or 401(k) retirement savings. Another family that has profits in long-held stocks might be able use a sale of losers to wipe out taxes on a sale of winners.