No. of Recommendations: 2
The bad news is if you are an American in a taxable account trump thanks you for 20 % and even worse if you live in Cali Newsom takes another 12 %, what a CONtry!!More than 20% in most cases! Federal tax is 24% for many of us here, and even 32% or 35% for some of us. And then there is an additional 3.8% medicare tax (Net Investment Income Tax) on any gains above a $250k income (or thereabouts). So, to determine the marginal rate, you usually have to add the 3.8%. So the marginal Federal rate for ordinary income, for some of us, is 35.8%. And all gains from short options are considered to be ordinary income. Long-term capital gains have a preferred rate of 15% or 20%, plus the 3.8% if applicable (and it's mostly applicable).
irs.gov - Federal income tax rates and bracketsirs.gov - Net investment income taxThen add to this any state taxes, and yes, California does indeed have relatively high income tax rates.
