unit 21 Flashcards
tax on income
progressive
rate increases and income increases
whats the best status to be used for someone who is single but has children
head of household
once you hit age 65
you get a higher standard deduction
earned income
from your job salary wages tips bonuses
ordinary income rates
passive income
ordinary income rates
rents
can offset passive losses(DPPS)
portfolio income
investment income
qualifying dividends
they are taxed at a rate lower than ordinary income
non qualifying dividends taxed at
ordinary income
bond interest taxed at
ordinary income
muni bonds taxed
interest tax free for federal
sometimes can be for state
are stock dividends taxed
no
the benefit of reinvesting dividends and capital gains
compounding effect
DRIPS
offered from issuers to shareholders
ether will be at a discount or free or commissions or both
can usually invest additional funds
Drip or mutual fund reinvestment tax based
tax based on year of receipt. You don’t avoid. not deferred
net capital loses(more losses than gains). how much can be offset
3000 max can be deducted on annual basis
can carry forward rest each year with 3k max
wash sale rule time
and what you can’t buy
30 days after or before. 61 to be safe day period
can’t take loss if you buy stock, call, convertible bond, rights, warrents