Legal Ways To Reduce Taxes On Precious Metals

Above, 1964 Kennedy Half dollars. Photo by Armand Vaquer.

With silver rising in the spot price market, collectors and investors have to be mindful of what the Internal Revenue Service wants during tax reporting time.

Economic Times posted an article how to reduce one's tax burden on precious metals.

They posted:

IRS tax rules for silver and gold: 

Silver’s surge past $90 an ounce has grabbed attention as gold climbed toward $5,300 in 2025 and 2026. Demand tied to the green economy, including heavy silver use in high-efficiency solar panels and the fact that EVs require roughly twice as much silver as gas-powered cars, has helped drive the rally, as per a report. 

How the IRS Taxes Silver and Other Precious Metals: The 28% Collectible Tax Rule Explained

But taxes can take a large share of those profits. The IRS treats physical precious metals differently from stocks, and profits may be taxed at rates of up to 28% or more.

Silver is a capital asset, meaning any profit from selling it must be reported on Schedule D of your federal tax return, as per the Yahoo Finance report.

Many investors assume holding silver for more than a year qualifies for the same long-term capital gains rates as stocks. However, the IRS classifies physical metals such as silver bars, rounds, and coins as collectibles.

If silver is held for one year or less, profits are taxed as ordinary income, which can be as high as 37% depending on your tax bracket.

If it’s held longer than a year, the gain is still taxed at your ordinary income rate but capped at 28%.

The article then goes on to tell how the tax burden can be reduced.

To read the full article, go here. 

Does the IRS Know If You Sell Silver?

Above, 2023 Canadian silver Maple Leaf coins. Photo by Armand Vaquer.

It is tempting to sell one's silver while the price of the metal is high. 

But, doing so may attract the attention of the Internal Revenue Service (IRS). It depends upon HOW one sells their silver.

CBS News posted an article on, "Does the IRS know of you sell silver?"

It begins with:

The precious metals market is capturing renewed investor attention thanks, in large part, to economic uncertainty driving heightened demand for tangible assets, which is helping to push up the price of these assets. And, while gold tends to dominate headlines with its record-breaking prices, it's certainly not the only precious metal that investors have been flocking to. Silver prices have also been climbing rapidly, especially over the past few months, leading silver to hit new record highs along the way. But at just over $88 per ounce, silver is still substantially more affordable than gold, making it a popular alternative for those who want to capitalize on today's precious metals market movement while diversifying their portfolios. 

But whether you own silver in bars, coins or other formats, a question often emerges when it comes time to sell: What does the Internal Revenue Service (IRS) know about your transactions? After all, the precious metals market operates in a complex regulatory landscape, and the rules governing reporting requirements vary significantly based on the type of silver you're selling and the quantity involved. So, it makes sense to understand both the IRS reporting obligations and whether the federal agency knows about your silver transactions before you sell your assets. 

To read more, go here. 

Kamala Harris Voted To Allow IRS To Track Tips

Earlier in this campaign, former President Donald Trump came out with a campaign promise to eliminate taxes on tips.

Now, all of a sudden, Kamala Harris is copying Trump's promise.

We should all take that with the proverbial grain of salt. She was the one who cast the tie-breaking vote on a bill to allow the Internal Revenue Service to track service industry workers' tips.

From Breitbart:

Vice President Kamala Harris — who on Saturday copied a campaign promise first announced by former President Donald Trump to eliminate taxes on tips — voted in 2022 to pass legislation that allowed the IRS to track down workers’ tips so that they could be taxed.

On August 7, 2022, Harris cast the tie-breaking vote to pass the Inflation Reduction Act that provided $80 billion in additional funding to the Internal Revenue Service (IRS), which then got to work cracking down on the service industry’s reporting of tips so that they could be taxed.

This is all a bunch of B.S. on her part. She is not to be trusted.

To read more, go here.

Tax Season 2024

Tax season is close to ending. April 15 (the Democrats' favorite day of the calendar) is fast approaching.

I sent my tax documents to my tax preparer already. It is easy to do in this day and age through emails and online reporting.

I have been getting tax refunds these past few years. So it isn't like the old days when I was working. This is definitely a benefit of being retired. 

Hunter Biden Charged

Hunter Biden has been charged with a gun felony and two tax misdemeanors.

The Daily Caller reported:

President Joe Biden’s son, Hunter, has been charged with a gun felony and two tax misdemeanors.

Hunter Biden was charged with illegally possessing a handgun in 2018 along with failing to pay federal taxes in 2017 and 2018.

“The first Information charges the defendant with tax offenses – namely, two counts of willful failure to pay federal income tax,” according to U.S. Attorney David Weiss’ letter. “The second Information charges the defendant with a firearm offense – namely, one count of possession of a firearm by a person who is an unlawful user of or addicted to a controlled substance.”

He has agreed to a probation agreement on the gun charge and agreed to plead guilty on the tax charges.

To read more, go here.

Income Tax Done Until Next Year

Another tax year has come and gone and I just completed my 2022 federal and state income taxes.

Thankfully, I don't have to pay anything, but will get a refund (more than the above image, by the way). So I don't have anything more concerning taxes until the property tax bills arrive at the end of the year.

The refund will go towards paying for the fuel for next month's clampout in Tombstone, Arizona.

House Proposal Will Hike Taxes

Former President Ronald Reagan used to have two descriptions (among many) of the Democrat Party:

They never met a tax they didn't like, or hike.

Republicans see every day as July 4th, the Democrats see every day as April 15. 

Proving once again that Reagan was right about them, the Democrats are planning to raise taxes. This time, it is during a period of high inflation and the possibility of a recession. Impeccable timing, eh?

The Epoch Times reported:

Taxes will go up for millions of lower- and middle-income taxpayers under the House Democrats’ version of President Joe Biden’s Build Back Better plan, according to two new analyses by the non-partisan professional staff of the congressional Joint Committee on Taxation (JCT).

“While Republican tax reform in 2017 cut taxes for all Americans, and increased the progressivity of the tax code, the Democrats’ approach to tax reform does not cut taxes for anyone, but it would raise taxes on millions of lower- and middle-income Americans at a time when they can least afford it,” U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) said in a statement issued late Monday.

“The economy is already reeling from Democrats’ bad policies and people are struggling to make ends meet. The last thing they need are higher taxes, especially in light of rising odds of a recession and stagflation,” the Idaho Republican continued.

Crapo was referring to the June 23 (pdf) and June 27 (pdf) analyses by the 10-member panel, which made the studies available to Members of Congress and their staff, but did not publicly issue news releases describing the results. Both analyses focused on H.R. 5376, as amended.

To read more, go here. 

It's The Most Wonderful Time of The Year

Well, I finally got my 2021 income tax documents to my tax preparer in California. I am doing it later than usual, mainly because I hadn't thought much about it since I generally don't have to pay anything (I will likely not get anything back either) since I retired.

I just had my Social Security, IRS (for the Economic Impact Payment) statements and 1099 for my investments to send. 

Next year, a new law passed and signed this year eliminates New Mexico taxation on Social Security, saving New Mexico seniors over $84 million next year. The idea is to entice seniors to move to New Mexico, now a more taxation-friendly state for them.

I "inherited" my tax preparer from my mom, who used him when she was alive and I have used him since 2011 or thereabouts.

UPDATE:

I'm shocked! I'm actually getting a tax refund!

Are RVs Tax Deductible?

Above, at La Mesa RV in San Diego. I didn't any consider tax
deductions when I made my purchase. Photo by Armand Vaquer.

One of the last things I even considered (actually, not at all) when I bought my 2015 Winnebago Minnie Winnie was tax deductions. 

I didn't finance it, I paid cash for it.

But, there are those out there in the hinterlands who are considering buying an RV and may be wondering if the purchase can be deducted off one's income taxes.

RV Life takes a look at this question and they begin with:

When you think about RVs, you probably think about fun, freedom, and adventure. And the least fun, free, and adventurous thing you can think of is probably taxes. But there is an interesting question here: are RVs tax deductible?

In fact, there are a few ways you can use your RV for tax deductions. If you:

• Bought your RV in the current tax year
• Use your RV as your primary or secondary home
• Use your RV for business purposes

Or if you have any combination of these, you may be able to make some deductions on your taxes. Let’s look at all the different ways this is possible.

To read further, go here. 

Social Security Benefits Exempt From NM Income Tax

People generally complain (with good reason) with government legislatures. But on rare occasions, the politicians do something that most people can get behind with enthusiasm.

Such is the case of having Social Security benefits exempt from income taxation in New Mexico.

From the Santa Fe New Mexican:

The state Senate unanimously approved a tax package early Thursday morning that exempts Social Security benefits from the state’s personal income tax and reduces New Mexico's gross receipts tax rate by 0.025 percent over two years — both priorities of Gov. Michelle Lujan Grisham.

And with just about eight hours to go before the end of this year's legislative session, the House of Representatives overwhelmingly voted to concur with the Senate changes to House Bill 163 later that morning. 

That legislation is now on its way to Lujan Grisham's desk for her signature. 

One of the reasons the state voted to exempt Social Security benefits from the income tax is to entice seniors to move to New Mexico.

To read more, go here. 

Competing Bills In New Mexico To End Social Security Income Taxes

Above, the New Mexico State Capitol, the Roundhouse. Photo by Armand Vaquer.

There are competing bills in the New Mexico state legislature that would do away with income taxes on Social Security in the current session.

GoBankingRates has an article on these bills.

They start it with:

The battle over Social Security income taxes is playing out in the Land of Enchantment, as lawmakers in New Mexico consider doing away with the state’s taxes on Social Security benefits.

In New Mexico, personal income taxes apply to Social Security benefits on all but lower-income residents, U.S. News & World Report noted. Individuals earning up to $25,000 and joint tax filers earning up to $32,000 get a full exemption.

But legislators in the state have introduced competing bills to end the tax on Social Security benefits. Gov. Lujan Grisham last week threw her weight behind a bill from state Sen. Michael Padilla to enact a full and immediate tax exemption for Social Security income.

A separate bill from Sens. Bill Tallman and Martin Hickey would end taxes on Social Security income for everyone except higher-income households. A third bill, backed by gubernatorial candidate Rep. Rebecca Dow, would phase out state taxes on Social Security income gradually between 2022 and 2026.

New Mexico is one of 13 states that have some kind of tax on Social Security benefits, KRQE reported, citing comments from Dow. Critics say the tax hurts the state’s ability to attract more retirees, which is one reason there is bipartisan support to get rid of it.

It appears likely that one of these bills will pass and be signed by the governor. 

What would really help seniors is reducing or eliminating property taxes.

To read more, go here.