![]() ![]() The 12% income tax bracket closely coincides with the 15% tax bracket for capital gains and qualified dividends. And individuals earning over $9,950 up to $40,525 and married couples earning up to $81,050 are in the 12% tax bracket. Let’s go over the 2021 lower bracket income tax rates. Individuals earning up to $9,950 and married couples earning up to $19,900 are in the 10% tax bracket. The difference between income tax and capital gains tax ratesįirst, it’s important to distinguish between income tax rates and the lower capital gains and qualified dividends tax rates. I apologize for the numbers and percentages that are about to follow, but I simply can’t avoid it when discussing tax planning. I want to cover a recent listener question: Will capital gains push me into a higher tax bracket? Knowing how to navigate the rules properly, and using proper tools, can literally save you sometimes thousands of dollars immediately and tens of thousands, if not millions, of dollars over the long haul! How Capital Gains Affect Taxes ![]() Taxes are not fun, but they are necessary. (As a reminder, last week we talked about reducing taxes using Roth IRA conversions.) On that note, we are continuing the *exciting* theme of tax planning. Benjamin Franklin (he wrote that in a letter in 1789)įranklin’s use of this idiom in his letter is not the first written use of the famous quote that “nothing is certain except death and taxes,” but I’m a fan of Franklin, so I chose his quote. Our new Constitution is now established, and has an appearance that promises permanency but in this world nothing can be said to be certain, except death and taxes. ![]()
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