Markets are down. Robo-advisors and savvy investors are tax-loss harvesting.
But me? I had no intention of doing so.
Thankfully, two Go Curry Cracker readers correctly pointed out I was wrong to not tax-loss harvest.
Yes, I absolutely am tax-loss harvesting and loving it. (Thanks!)
2019 was our 7th full year of this thing we do. It’s been an incredible ride – we’ve traveled, adventured, and procreated, with the best yet to come.
We’ve also done a fair amount of tax optimization, paying little tax each year while taking steps to minimize future taxes. How effective have we been with our tax optimization strategery?
Do these optimization efforts actually work, or is this just fantasy? (Caught in a landslide, no escape from reality…)
2019 was our 2nd tax year under the Tax Cuts and Jobs Act (TCJA), 3rd year using the Foreign Earned Income Exclusion (FEIE), and 7th year of paying ~$0 in income tax on dividends, interest income, and blog revenue.
But… this year I also realized a massive long-term capital gain which resulted in a massive tax bill.
Our 2019 tax return has some good examples of the FEIE, the long-term benefits of capital gain harvesting, and tax and travel hacking synergies.
Here are all the fun details.
We will never have the experience of receiving an inheritance, but GCC Jr will.
In my role as fiscal steward, I would like to ensure that he, along with our other beneficiaries, receive the largest amount possible. (After we are done spending as much as we want, naturally.)
But Jr only gets what the IRS doesn’t take, so I’m taking my tax efforts to the next level: multi-generational tax minimization.
Note: The ability to withdraw funds over the beneficiaries lifetime was eliminated in the SECURE Act. Check out the details here.
For us, going back home (to the United States) means enrolling in an ACA health insurance policy and potentially stepping into the clutches of a State tax authority (e.g. California.)
Does this mean we will Never Pay Taxes Again?
Maybe.
