The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Penalty for reaching next tax bracket?||Date: 3/23/2007 11:56 AM|
|Author: straitarrow||Number: 93225 of 121572|
" All that happens when you pass the magic number of $61,300 is that your next dollar of earnings is taxed at 25% instead of 15%. Nothing happens to the dollars that have already been taxed. "
A further question, please...
If the earning of $1 above bumps one into the 25% bracket for the next dollar, what is the tax effect if the $1 is from LT Capital Gain from a stock sale?
Or, to make it more specific and interesting, consider a $100,000 or more LTCG over the $61,300 magic number.
Not that I intend to sell, mind you, just curious. I hope to let my stock cost basis step up at checkout time.
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