Today we look at how dividends and capital gains will be taxed after the fiscal cliff deal, officially known as the American Taxpayer Relief Act of 2012. Don’t be surprised it gets a little more complicated. First of all when I say dividends and capital gains, I’m referring to qualified dividends and long-term capital gains. […]
ACA 3.8% Medicare Tax and Alternative Minimum Tax (AMT)
Now that the health care reform law is upheld by the Supreme Court, the 3.8% Medicare tax on unearned income for high earners is also here to stay. It will come into effect in 2013. Just to recap, the chart below shows how it works: The tax is on unearned income — interest, dividend, capital […]
Selling Noncovered Shares With Specific Identification At Vanguard
The IRS implemented new rules to help the taxpayers report capital gains and losses from securities sales more accurately. They did it by requiring the brokers and mutual fund companies to report the cost basis for securities bought after a certain date and subsequently sold. For stocks and ETFs, that date is January 1, 2011. […]
Tax on Capital Gains While Receiving Social Security Benefits
I wrote about tax-free capital gains when you are in the 15% tax bracket or lower. I created this chart to make it clearer what I’m talking about (click on the chart for a larger size). Your gross income first goes toward the pre-tax deductions from your paychecks (401k, health care insurance premiums, flexible spending […]
3 Reminders About Year-End Mutual Fund Distributions
I wrote on Tuesday that I bought PIMCO CommodityRealReturn Strategy Fund D (PCRDX) on Dec. 5, 2008. It’s a good segue to today’s post. As luck had it, only a few days later, my jaw dropped when I saw the price of the fund dropped 25% in one day. It turned out it was just […]