Smart ways to reduce capital gains tax without a financial planner?

Does tax-loss harvesting really save money long term though? If I sell something at a loss, I'm still... losing money? And what about the Medicare surtax? I heard there's an extra 3.8% tax if your income is above a certain amount. Do these strategies help with that too?

Tax-loss harvesting isn't about making losing investments - it's about strategically recognizing those losses for tax purposes when they happen. You might sell a losing investment you were planning to sell anyway, and use that loss to offset gains elsewhere. So you're not losing extra money, just timing the recognition of existing losses strategically. Regarding the Net Investment Income Tax (the 3.8% Medicare surtax), you're right - it applies to individuals with modified adjusted gross income above $200,000 ($250,000 for married filing jointly). Most of these strategies do help reduce your MAGI, which can potentially keep you below the threshold for this additional tax.

Does it work with crypto investments too? I've got a mix of stocks and some ethereum/bitcoin that I've been trading and the crypto part gets really confusing for taxes.

I'm a little skeptical... how does it actually get your investment data? Do you have to manually enter everything? I've got accounts across like 4 different brokerages and the thought of entering all that transaction data sounds painful.

Yes, it definitely works with crypto investments too! It handles all the special tax rules for cryptocurrency and can recommend strategies specifically for your crypto holdings. It's actually really helpful for crypto because those transactions can get super complicated tax-wise. The data import is actually pretty smooth. You can connect your brokerage accounts directly or upload the tax forms/transaction histories that your brokerages provide. I had accounts with Fidelity, Robinhood and Coinbase, and it pulled everything in automatically. No manual entry needed for most major brokerages and crypto exchanges.

Wait, how does this actually work? They somehow let you skip the IRS phone queue? That sounds too good to be true honestly. The IRS wait times are a nightmare but I didn't think there was any way around that.

I've tried dozens of "tricks" to get through to the IRS and none worked. Their automated system is designed to be impenetrable. I find it hard to believe any service could actually get through when the IRS phone lines are deliberately understaffed. Sounds like an elaborate scam to me.

It's actually pretty straightforward - they use an automated system that continually redials the IRS until they get through, then they call you to connect you with the agent. You don't skip the queue exactly, they just handle the waiting for you so you don't have to sit there listening to hold music for hours. I was definitely skeptical too before trying it. I had spent three separate days trying to get through myself with no luck. But it's completely legitimate - they don't ask for any personal tax information and they don't stay on the call. They just connect you directly with the IRS agent and then drop off the line so your conversation is private.

Is there something similar to 1031 exchanges but for stocks? Like if I wanted to sell my Amazon shares and buy Google instead, is there any way to defer the capital gains?

Unfortunately, there isn't a direct equivalent to 1031 exchanges for stocks. Those tax-deferred exchanges are specifically for real estate and certain types of personal property, but not securities like stocks or bonds. When you sell stocks, even if you immediately reinvest the money in different stocks, you'll generally have to pay capital gains tax on any profit. The closest option for stocks would be to do your investing within tax-advantaged accounts like IRAs or 401(k)s where you can buy and sell without triggering immediate tax consequences, but that doesn't help for investments you already hold in taxable accounts.

I've been doing this for my clients for years. The key is tracking specific tax lots meticulously and choosing which ones to sell based on your current year tax situation. Some brokerages make this easy with their cost basis settings (specific identification method instead of FIFO). Just make sure you're consistent with your approach.