January 22, 2015

What is the long term capital gains rate for people in the 10% and 15% tax brackets? Why is this important?

4 thoughts on “January 22, 2015”

  1. Brennan Haag says:

    You pay nothing on capital gains if you are in the 10 or 15 percent bracket. This is important because you can use this to make untaxed income without much work at all.

  2. Garrett Haag says:

    In that tax bracket federally you pay 0% on long term capital gains and qualified dividends. This is important because you need to know how to avoid any extra tax liabilities that you do not need. You need to know what the outcome will be if you take money out of your accounts and it had not been long enough to be long term capital gains. You should know how long you will have to wait to avoid the extra taxes. If you are a lower income person and you invest well there is no reason to pay taxes on your investments at this current time and tax system.

  3. Mike Dunlop says:

    The tax bracket for people in the 10% and 15% income tax brackets is currently 0% for long term capital gains. This means that as long as your income tax bracket stays in the 2 listed brackets, you would owe nothing on the investment income that you make. This information is important as you plan your retirement. When planning your retirement, you will use this information to create a strategy giving you the most possible income while incurring the least possible liabilities (taxes). You will accomplish this by investing in a combination of taxed and tax free investments. Certain investments are taxed going into the investment and not taxed when you withdraw, such as a Roth IRA. Other investment vehicles are not taxed going into the investment, but rather are taxed when you withdraw the money, such as a traditional 401(k) or IRA. By combining these two types of investments, you can effectively withdraw more money than the max amount for 0% long term capital gains and still owe no taxes.

  4. Mike Finley says:

    Great answers, gentlemen. I have nothing to add.

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