Taxing Moments

Few tax code provisions are as complicated as the rules regarding the taxation of Social Security. If your income (counting tax-exempt interest but only half of your Social Security benefits) is in between $25,000 and $50,000 (for single filers, or $32,000 and $60,000 on joint returns), planning might be helpful.

One tactic is to invest in low-dividend and no-dividend stocks. If you buy and hold, they will produce little or no income, which can hold down the tax you'll owe on Social Security benefits.

Taking stock losses also will help because they can offset any capital gains you might incur while net capital losses up to $3,000 can be deducted from other income.

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