 |
|
|
|||||
| « Previous thread | Next thread » |
According to this month's AARP magazine, Congress is
allowing (through 2010?) a tax break on securities held
longer than one year, to couples with incomes less than
$65,100. I am thinking I could take money out of one
or more of our IRAs, assuming our then-total income is
less than the $65k number, paying no tax on those dollars.
Still, what seems too good to be true likely isn't. Is anyone
here familiar with this issue, and am I safe in removing
X amount of money from present IRAs, paying no additional
taxes thereby?
HC
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
"Hugh Clary" <b...@n...ZAPTHISnet> wrote in message
news:48c9334d.6882015@news.individual.net...
> Still, what seems too good to be true likely isn't. Is anyone
> here familiar with this issue, and am I safe in removing
> X amount of money from present IRAs, paying no additional
> taxes thereby?
Aren't capital gains in an IRA taxed as ordinary income when withdrawn?
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
On Sep 11, 10:36 am, "Andrew Koenig" <a...@a...org> wrote:
> "Hugh Clary" <b...@n...ZAPTHISnet> wrote in message
>
> news:48c9334d.6882015@news.individual.net...
>
> > Still, what seems too good to be true likely isn't. Is anyone
> > here familiar with this issue, and am I safe in removing
> > X amount of money from present IRAs, paying no additional
> > taxes thereby?
>
> Aren't capital gains in an IRA taxed as ordinary income when withdrawn?
>
I believe you are correct. And removing funds from the IRA bumps the
income above $65,000 is another concern. Also early withdrawal
penalties may apply.
In other words, it's true, but not too good for most people.
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
Hugh Clary wrote:
> According to this month's AARP magazine, Congress is
> allowing (through 2010?) a tax break on securities held
> longer than one year, to couples with incomes less than
> $65,100. I am thinking I could take money out of one
> or more of our IRAs, assuming our then-total income is
> less than the $65k number, paying no tax on those dollars.
Hugh, the tax break doesn't apply to all income types, just long-term
capital gains and "qualified dividends", both from investments held in
taxable accounts. An IRA distribution is "ordinary income" which is
taxed at the normal bracket rates.
That $65,100 figure is the top of the 15% tax bracket for married
couples who file jointly...really the tax code states that the long-term
capital gains rate is 0% for someone in the 15% or lower tax brackets.
Someone in that situation (the majority of taxpayers) could sell a stock
or mutual fund held in a taxable account, and pay no tax on the gains,
as long as their total income remained under $65,100.
Example: You figure out your taxes and end up with $55,000 in taxable
income. You have a mutual fund with $10,000 in long-term gains. You
could sell the mutual fund and pay no federal income tax, because your
taxable income is $65,000, which is below the top of the 15% tax
bracket. When you calculate your taxes, the worksheet will take out that
$10,000 and give it the 0% tax rate. Your state taxes would still apply.
-Tad
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
"Hugh Clary" <b...@n...ZAPTHISnet> wrote in message
news:48c9334d.6882015@news.individual.net...
> According to this month's AARP magazine, Congress is
> allowing (through 2010?) a tax break on securities held
> longer than one year, to couples with incomes less than
> $65,100. I am thinking I could take money out of one
> or more of our IRAs, assuming our then-total income is
> less than the $65k number, paying no tax on those dollars.
>
wait a minute! I keep hearing certain people saying only the super rich
have capital gains. What the heck?
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
| « Previous thread | Next thread » |
FROM THE MODERATORS: Lengthy posts
Big Slide in 401(k)s Spurs Calls for Change
Short-term Fund purchasing advice...
American Funds Capital World G/I A
Calculating a present value in a pension?
Hi-rate online savings account allowing 3 owners?
Up