Talk of The Villages Florida - Rentals, Entertainment & More
Talk of The Villages Florida - Rentals, Entertainment & More
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Financial question: delaying taxes on interest earned
I have I-Bonds and several MYGA’s that accumulate interest but tax on the interest is delayed until I choose to cash out. These are non-qualified accounts. Are there other products available that offer a guaranteed fixed rate of return and are insured against loss that pay above 4%?
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#2
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You can earn as much as 5.1 percent on a Fidelity brokered CD. But, the taxes on the interest must be paid annually, even for a multi-year CD. Go to Fidelity.com to view the available CDs.
My Vanguard money market account is currently paying 4.78 percent interest. |
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#7
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This is an excellent method to delay taxes on US treasury bonds. Not only are you delaying the taxes, but the there is a tax savings due to the capital gains rate. And under current rules you pay zero tax on your first $41,675 in longterm capital gains if filing as single or $83,350 in long term gains if married filing jointly This results in more total money in your pocket. |
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#9
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Where can I go to find such an investment?
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#10
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Fidelity Investments. They have an office at Lake Sumter.
You can also buy bonds through Vanguard. |
#11
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Be sure to check the markups on price and factor in lack of liquidity should you not hold to maturity. Bonds are not guaranteed like a cd. Bond holders have little protection from corporate actions that adversely affect you. Lumping interest can affect your Medicare premium in the future. Run tax consequences models
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#12
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If you have an account at Fidelity, go to
Fidelity.com is Temporarily Unavailable Then browse either US treasuries or US Treasury zeros. The zeros pay no interest … but are priced at a discount so when the bond matures you have a capital gain. Find the bonds with the time frame you want (more than 12 months so any gains are long term). Identify the bonds with zero or very low interest rates. Compare the yield to maturity and yield to worst for the different bonds. Pick the highest. Since all are US treasuries, the risk is the same. Vanguard has similar offerings. And to be clear, I am only talking about US Treasury ot US Treasury zeros. Corporate bond have the same potential, but requires much more expertise to avoid pifalls. US treasuries are always have great liquidity. |
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#15
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What was posted is not correct...............U R right to question.
"For example, in 2022, individual filers won't pay any capital gains tax if their total taxable income is $41,675 or below. "
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Identifying as Mr. Helpful |
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