Active Income Passive Income And Portfolio Income

Passive income is money you regularly receive without performing active work.

Active income passive income and portfolio income. You can also earn money passively as rental income interest on savings accounts and certificates of deposit or winnings from a lottery for example. However capital gains and passive income are taxed at rates ranging from 0 to 20. Passive income is taxed with the same rates as capital gains which are much lower than ordinary income. And no that wasn t a typo at certain levels of passive income you may not be taxed at all.

What is active income. While active income ranges between 10 to 37 increasing progressively as that income gets higher. Active income is the income that you receive as a result of your work or services in which you actively participate. There are 3 types of income.

This includes wages tips salaries commissions and income from businesses in which there is material participation. It includes wages tips salaries commissions and income from businesses as well. Income for which services have been performed. Active income is also referred as earned income.