Making The Most Of This Tax Season For Investors

Jan 5, 2023

Tax season is here. For some it is a stressful and expensive time. For other investors it is a time of windfalls, big savings, and compounding returns.

How do you make sure you are in the second group?

Hold Onto Those Deals

Some new real estate and mortgage note investors get especially stressed in the first couple of months of the year. Tenants and borrowers often run late after blowing their money on holiday shopping, then wrestle with the credit card bills coming due. The data can also be lackluster after weeks of buyers and renters being on vacation, rather than looking for new places. 

If you give up too fast and sell out cheap, you are probably creating a huge opportunity for the next investor.

The majority of the population seem to drag their bills all year until they get that tax refund back after loaning the government their cash all year long. This is when renters catch up on payments, or come into new apartments flush, while buyers have down payment money, and borrowers can catch up on property taxes. 

Tax Saving Accounts For The Whole Family

You probably already know about self-directed 401ks and IRAs. As well as HSAs and ESAs. But, do you have self-directed IRAs for your whole family? Your kids and spouse can typically qualify for them, far multiplying the amount of tax free or tax deferred investing you can do, or annual tax deductions. Be sure to max out those contributions. 

Explore Tax Deferred Exchanges

Especially during these times when it can be important to restructure portfolios and trade assets, tax deferred exchanges can make a big difference in net returns. 

In addition to 1031 exchanges there are also DSTs. 

Tax Loss Harvesting

If you are bailing out of losing investments, take advantage of tax loss harvesting to lower your tax liability, and reinvest that cash instead of giving it to the IRS.  

Get Ahead With Your Bookkeeping

The more organized you are, the less time and budget you’ll spend on bookkeeping, and tax prep. You’ll be a lot less stressed, and gain more breaks, take less hits, and suffer fewer mistakes.

Set New Strategy For The Next Year

Work with the best CPA, accountants, and tax experts you can find to take into account all of the new taxes, tax rates, and stripping of breaks you used to get. Create a plan for the next year in advance.

Don’t Forget Your Property Taxes

It’s been a roller coaster year. Some tax bills may be up dramatically, others ought to have gone down. Challenge them, and use all the exemptions and breaks available to you. 

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund.

Photo by Kelly Sikkema on Unsplash