A capital gain is the profit from selling an investment for more than you paid. Short-term gains (held ≤1 year) are taxed at ordinary income rates; long-term gains (>1 year) get preferential rates of 0%, 15%, or 20%.
Long-term capital gains are one of the most powerful tools in the retirement tax code. For many couples, the 0% LTCG bracket means $96,700+ of capital gains every year can be harvested completely tax-free — but only if you understand how it stacks with ordinary income.
The US federal income tax uses marginal brackets: each additional dollar of income is taxed at the rate of the bracket it falls into, not th…
A Roth conversion moves money from a traditional IRA or 401(k) to a Roth IRA. You pay ordinary income tax on the converted amount in the yea…
A stock is a fractional ownership share in a publicly traded company. Stockholders benefit when the business grows (price appreciation) and,…
An index fund is a mutual fund or ETF that tries to match — not beat — a market index like the S&P 500 or Total US Stock Market. No active m…