Passive Income Taxes Rate

Short term passive income tax rates.

Passive income taxes rate. Long term capital gains and qualified dividends are taxed at zero 15 and 20 percent for 2017 but the brackets are different. In other words short term capital gains are taxed at the same rate as your income tax. Gee that sure beats the 40 tax treatment on an extra work shift in december. The current tax rates for short term gains are as follows.

The passive income tax rate is the same as the active income tax rate but with the addition of several benefits that become apparent come tax time. As mentioned previously short term gains apply to assets held for a year or less and are taxed as ordinary income. The cumulative tax bill above is 1 835 on 14 373 of gross annual passive income yielding a blended passive income tax rate of 13 on my personal lineup of passive investments. For 2017 passive income that is taxed as ordinary income will be taxed in the 2017 tax brackets and so the income tax rates range from 10 to 39 6 percent depending on your annual income.