Are there any special considerations for people with investments when it comes to filing taxes?

Income you receive from unqualified interest and dividends is generally taxed. Investment income often includes interest and dividends. The income you receive from unqualified interest and dividends is generally taxed at your ordinary income tax rate. Certain dividends, on the other hand, may receive special tax treatment, which are generally taxed at lower tax rates on long-term capital gains.

Your investment brokerage firm must provide information on whether your dividends meet the requirements or not. Keeping your investments in the most tax-appropriate type of account can complement your savings plans by helping to reduce taxes (or, in the case of a Roth account, eliminate taxes on investment returns entirely). TurboTax Live Premier's tax experts are available in English and Spanish all year round and can also review, sign and file your tax return. When specific advice is necessary or appropriate, Schwab recommends consulting with a qualified tax advisor, public accountant, financial planner, or investment manager.

Some taxes are due only when you sell investments at a profit, while other taxes are due when your investments pay you a distribution. You can even connect virtually with a specialized tax expert who will prepare and file your full tax return with TurboTax Live Full Service without you having to leave your home. Diversification through tax treatment can be especially important if you're not sure which tax bracket you'll end up in the future. Whether you get any planned tax results depends on the specific facts of your situation at the time you file your tax return.

To choose to defer tax on a profit if you have already filed your federal income tax return, file a modified return or an Administrative Adjustment Request (AAR), as appropriate, with a full choice on Form 8949. In addition to the income taxes described above, those with significant income may be subject to net investment income tax, which is an additional 3.8% tax in addition to the usual capital gains taxes. For example, municipal bonds are normally free of federal income taxes, but they may be taxable on your state tax return, depending on the state in which you live and the state that issued the bond in which you invested.

Eva Dougherty
Eva Dougherty

Lifelong baconaholic. Webaholic. Professional bacon guru. Evil travelaholic. Total tv lover.

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