Читать книгу Investing For Dummies - Eric Tyson - Страница 73

Interest you receive from bank accounts and corporate bonds is generally taxable. U.S. Treasury bonds pay interest that’s state-tax-free. Municipal bonds, which state and local governments issue, pay interest that’s federal-tax-free and also state-tax-free to residents in the state where the bond is issued. (I discuss bonds in Chapter 7.)

Taxation on your capital gains, which is the profit (sales minus purchase price) on an investment, works under a unique system. Investments held less than one year generate short-term capital gains, which are taxed at your normal marginal rate. Profits from investments that you hold longer than 12 months are long-term capital gains. These long-term gains cap at 20 percent, which is the rate that applies for those in the highest federal income tax brackets. This 20 percent long-term capital gains tax rate actually kicks in (for tax year 2020) at $441,450 of taxable income for single taxpayers and at $496,600 for married couples filing jointly. The long-term capital gains tax rate is just 15 percent for everyone else, except for those in the two lowest income tax brackets of 10 and 12 percent. For these folks, the long-term capital gains tax rate is 0 percent.

To help pay for the Affordable Care Act (Obamacare), taxpayers with total taxable income above $200,000 (single return) or $250,000 (joint return) from any source are also subject to a 3.8 percent extra tax on the lesser of the following:

 Their net investment income, such as interest, dividends, and capital gains; net investment income excludes distributions from qualified retirement plans

 The amount, if any, by which their modified adjusted gross income (MAGI) exceeds the dollar thresholds; MAGI is adjusted gross income plus any tax-exempt interest income

Use these strategies to reduce the taxes you pay on investments that are exposed to taxation:

 Opt for tax-free money markets and bonds. If you’re in a high enough tax bracket, you may find that you come out ahead with tax-free investments. Tax-free investments yield less than comparable investments that produce taxable earnings, but because of the tax differences, the earnings from tax-free investments can end up being greater than what taxable investments leave you with. In order to compare properly, subtract what you’ll pay in federal as well as state taxes from the taxable investment to see which investment nets you more.

 Invest in tax-friendly stock funds. Mutual and exchange-traded funds that tend to trade less tend to produce lower capital gains distributions. For funds held outside tax-sheltered retirement accounts, this reduced trading effectively increases an investor’s total rate of return. Index funds invest in a relatively static portfolio of securities, such as stocks and bonds (this is also true of some exchange-traded funds). They don’t attempt to beat the market. Rather, they invest in the securities to mirror or match the performance of an underlying index, such as the Standard & Poor’s 500 (which I discuss in Chapter 5). Although index funds can’t beat the market, the typical actively managed fund doesn’t, either, and index funds have several advantages over actively managed funds. See Chapter 8 to find out more about tax-friendly stock mutual funds, which includes some non-index funds, and exchange-traded funds.

 Invest in small business and real estate. The growth in value of business and real estate assets isn’t taxed until you sell the asset. Even then, with investment real estate, you often can rollover the gain into another property as long as you comply with tax laws. However, the current income that small business and real estate assets produce is taxed as ordinary income.

Short-term capital gains (investments held one year or less) are taxed at your ordinary income tax rate. This is another reason you shouldn’t trade your investments quickly (within 12 months).