Like profits from the sale of stock and dividends from a cd/bank account/stock/mutual fund? The reason I am asking is because I want to stay in a lower tax level and I might increase my tax deffered IRA account inorder to stay in the lower level. I am getting pretty close.
2006-12-27 10:58:22 · 2 answers · asked by Matt 2 in Business & Finance ➔ Taxes ➔ United States
Do capital gains affect what tax bracket I will fall into?
2006-12-27 11:19:18 · update #1
Capital Gains
2006-12-27 11:00:32 · answer #1 · answered by Captain Jack 6 · 0⤊ 0⤋
Profits from the sale of stock: Capital Gains.
Interest on a CD or bank account: Interest income
Dividends on mutual fund: Dividends
Regardless of where your investments are recorded, you can reduce your taxable income by increasing IRA contributions as allowed.
Long-term (over 1 year) capital gains and qualified dividends will usually not increase your tax bracket. Short-term capital gains and interest income are taxed at your regular rate and may put you in a higher bracket.
2006-12-27 21:07:49 · answer #2 · answered by ninasgramma 7 · 0⤊ 0⤋