My friend says that interested earned in MMA is not real because almost everything goes to taxes. Is that true?
2007-04-14 05:11:55 · 3 answers · asked by truefreedom21 3 in Business & Finance ➔ Taxes ➔ United States
At most, 35% goes to federal taxes, and that's only if you're in the highest tax bracket which few people are, most people's brackets are WAY less than that. State taxes can take from zero to maybe 10% more. That would still leave over half for the recipient.
2007-04-14 05:36:05 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
Your friend is wrong. The maximum tax rate in the USA is 35%. In a high-tax state you may pay another 8% to the state so that's still only 43%. The vast majority of people pay much less than that. I pay around 14% on my savings.
Does your friend work? Does your friend accept a paycheck or is it not worth it because too much tax gets taken out?
What your friend might be trying to say is that it is a good idea to save for retirement in a tax-advantaged IRA or 401k account. That is true but it is also necessary to put money away for a rainy day which can be accessed without the penalties for early withdrawal from an IRA. in that case, a money market account works just fine.
2007-04-14 05:17:54 · answer #2 · answered by skip 6 · 1⤊ 0⤋
definite, you do. pastime is taxable earnings, and in case you obtain a 1099 for it, it became reported via the payer to the IRS. you are able to properly be listening to from the IRS in this at last (it may take a pair years). H&R Block has many functional workers, yet some are actually not properly knowledgeable.
2016-12-20 14:41:32 · answer #3 · answered by ? 3 · 0⤊ 0⤋