about how much or what percent would taxes be on interest in an account?

Answer 1

Well, if I was trying to figure out how a "chunk" (to use a good 'ol East Texas word) of interest was going to affect my income tax return for the coming year, I'd first get out last year's return.

Now, if it's a regular bank account or CD, that would be added to regular income and would increase your Adjusted Gross Income, therefore increasing your Taxable Income. There isn't a percentage that applies to interest, as such, so you'd need to look up the Taxable Income amount in the Tax Table, under the correct filing status for your situation, and see how much tax will be owed (estimated, of course, because the 2007 tax tables aren't out yet) on that amount of money.

If it's an IRA, the interest won't be taxable to you until you take distributions from it -- if then.

If it's an investment account or money market account, it may very well be interest, but taxed as a short or long term capital gain. Short term capital gains result when they are held one year or less. Long term capital gains result when they are held for over a year, even if it's a year and a day.

Answer 2

Depends on the amount of interest, what your other income is, how much taxable income you have. No way to tell you in advance without knowing your entire tax situation. Could be anwhere from 0 to 35%. Plus state income tax on the interest as well.

Answer 3

It's ordinary income, taxed at your marginal rate.