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Long term capital gains and qualified dividends are taxed lower than regular income, if at all. And this should be most of their income.
by thunky 2y ago
Long term capital gains and qualified dividends are taxed lower than regular income, if at all. And this should be most of their income.
- seanmcdirmid 2y agoNormal 401K is taxed as income because the contributions aren’t taxed on the way in. Your investments that are based on principal that has already been taxed will be taxed as capital gains.
- thunky 2y agoYeah good point, this will make a dent if most/all of their $ is coming from a 401k. Hopefully they have other sources to pull from to lower their taxable income (and tax bracket). And at least there is the standard deduction. And maybe no state income tax.