Print Page   |   Contact Us   |   Sign In   |   Register
All Income is NOT taxed the same
Share |

Not all income is taxed the same.

Wages, tips, self-employment income and other compensation

  • Taxed at Ordinary Income rates, ranging from 10-39.6%
  • 100% subject to Medicare taxes
  • Up to $117,000 is subject to Social Security taxes

Investment income

  • Interest, short-term capital gains and non-qualified dividends are taxed at Ordinary Income rates, ranging from 10-39.6%
  • Long-term capital gains and carried interest are currently taxed at lower rates, ranging from 0-20% 
  • Qualified dividends are currently taxed at 0-20%
  • Subject to Medicare surcharge tax of 3.8% when overall income exceeds $200k for Singles and $250k for Married filers

Retirement plan distributions

  • Pre-tax contributions and growth are taxed at Ordinary Income rates, ranging from 10-39.6%
  • After-tax contributions are not taxed--growth is taxed at Ordinary Income tax rates, ranging from 10-39.6%
  •  Qualified distributions from ROTH accounts are not taxed 
  • Not subject to Medicare or Social Security taxes

Social Security

  • Up to 85% may be taxed at Ordinary Income tax rates, ranging from 10-39.6%
  • Not subject to Medicare or Social Security taxes

NOTES:  The Federal tax code is complex and changes.  This information is general in nature, not comprehensive.

States tax income differently.


 

<NEXT:  Determine Your Tax Filing Status>

Search
Sign In
Sign In securely
Home

My Plan

Join a Group

ADV Part II


F.A.Q.

Blogs

 

Where should I save?

 Where should I invest?