Dr. Friday demystifies capital gains tax and the often-overlooked net investment income tax. While many know the capital gains rates of 15% or 20%, she explains how the additional 3.8% net investment tax applies at certain income thresholds, making the actual rates 18.8% or 23.8%. Get clarity on these rates and avoid surprises in your tax bill.
Transcript:
G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Capital gains and, more importantly, net investment income tax. So often, you hear people talk about capital gains tax—15%, 20%—but very rarely do they also mention the net investment income tax, which is 3.8% and falls in between the 15% and 20%.
If you’re a single person with up to $200,000 in income, your capital gains rate is 15%. Beyond that, it’s actually 18.8% until you reach the highest rate of 23.8%. There really is no standalone 20% capital gains rate, people!
If you need help or clarification, call us at 367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.