Understanding the Tax Implications of Remote Employees

What is Tax-Loss Harvesting

Tax-loss harvesting means that you sell investments at a loss in order to offset gains. This way you “harvest” the losses to offset gains and reduce your tax obligation.

This makes sense if:

The investor intends to sell the stock anyway or does not believe that the losses will turn to gains.

For example:

Assume the investor has a realized, taxable gain of $100 and owes $20 on that gain.

-> The tax bill is $20

The investor has another stock with an unrealized loss of $100 that they intend to sell. If they sell this before the end of the year the $100 loss counts against the gain, reducing the gain to 0.

-> The tax bill is 0

However, if the investor believes the stock is undervalued and will soon recover the loss and yield a gain this strategy may not make sense. You would have to weigh the gain of tax saved versus the potential gain of holding on to the stock.

Tax-loss harvesting as an ongoing strategy

If an investor sells a stock then immediately re-buys the stock this is considered a wash sale. There is no realized loss.

However, investors can sell a stock, realize the loss, then buy a similar stock that they expect to perform the same way.

Perhaps they expect Apple and Microsoft to perform about the same. They have an unrealized loss in Apple. So they sell out of Apple and buy Microsoft, realizing the loss while retaining the opportunity for upside.

This strategy is most effective when mimicking an index.

Often investors will buy a basket of stocks that replicate the performance of the S&P 500 then they sell and buy at the end of the year in such a way that they realize losses but continue to replicate the S&P 500.

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Jeff Coyle, CPA

Jeff Coyle, CPA, Partner of Rosenberg Chesnov, has been with the firm since 2015. He joined the firm after 20 years of business and accounting experience where he learned the value of accurate reporting, using financial information as a basis for good business decisions and the importance of accounting for management.

He is a diligent financial professional, able to manage the details and turn them into relevant business leading information. He has a strong financial background in construction, technology, consulting services and risk management. He also knows what it takes to create organizations having built teams, grown companies and designed processes for financial analysis and reporting.

His business experience includes:

Creating and preparing financial reporting, budgeting and forecasting.
Planning and preparation of GAAP and other basis financial statements.
Providing insight on financial results and providing advice based on those results.

Jeff also has a long history of helping individuals manage their taxes and plan their finances including:

Income tax planning and strategy.
Filing quarterly and annual taxes.
Audit support.
General financial and planning advice.
Prior to joining the firm in 2015, Jeff was in the private sector where he held senior financial and management positions including Controller and Chief Financial Officer. He has experience across industries, including construction, technology and professional services which gives him a deep understanding of business.

Jeff graduated from Montclair State University, he is a CPA and member of the American Institute of Certified Public Accountants, New York State Society of Certified Public Accountants and New Jersey State Society of Public Accountants.

Jody H. Chesnov, CPA

Jody H. Chesnov, CPA, Managing Partner of Rosenberg Chesnov, has been with the firm since 2004.  After a career of public accounting and general management, Jody knows the value of good financials.  Clarity, decision making, and strategy all start with the facts – Jody has been revealing the facts and turning them into good business results for more than three decades.

He takes a pragmatic approach to accounting, finance and business. His work has supported many companies on their path to growth, including helping them find investors, manage scaling and overcome hurdles.  His experience and passion for business reach beyond accounting and he helps businesses focus on what the numbers mean organizationally, operationally and financially.

He has a particular expertise in early-stage growth companies.  His strengths lie in cutting through the noise to come up with useful, out of the box, solutions that support clients in building their businesses and realizing their larger visions.

Prior to joining the firm in 2004, Jody was in the private sector where he held senior financial and management positions including General Manager, Chief Financial Officer and Controller.  He has experience across industries, which gives him a deep understanding of business.

Jody graduated with a BBA in Accounting from Baruch College, he is a CPA and member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants.

In addition to delivering above and beyond accounting results, Jody is a member of the NYSCPA’s Emerging Tech Entrepreneurial Committee (ETEC), Private Equity and Venture Capital Committee and Family Office Committee.  

He is an angel investor through the Westchester Angels, and has served as an advisor for many startup companies and as a mentor through the Founders Institute.