DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing All About Investments - Taxes and Accounts
Jun 23, 2025
Quint and Allie dive into the world of investing with a focus on the often-overlooked tax implications. They clarify how different investment accounts, including retirement options, can have varying tax benefits. The discussion breaks down capital gains tax and its effects on investment strategies, explaining the nuances between long-term and short-term gains. They also highlight the importance of Health Savings Accounts and how these can enhance financial planning while offering tax advantages. Get ready to rethink your investment tactics!
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Taxes on Investment Income
- Investment income can trigger various taxes such as interest, dividends, and capital gains.
- Taxes apply not only to stocks but also bank accounts and CDs where interest accrues.
Capital Gains Tax Basics
- Capital gains tax rates are lower than ordinary income tax rates, incentivizing long-term investments.
- Long-term capital gains apply if you hold an investment over one year before selling at a profit.
Avoid Short-Term Capital Gains Tax
- Avoid short-term capital gains tax by holding investments over a year.
- Short-term gains are taxed at your ordinary income tax rate, typically higher than long-term rates.