Investment Income

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Definition of 'Investment Income'

Investment income is the profit that an individual or company earns from their investments. This can include interest from savings accounts, dividends from stocks, and capital gains from the sale of assets. Investment income is taxed at different rates depending on the type of investment and the investor's tax bracket.

There are a few different ways to calculate investment income. One way is to add up all of the interest, dividends, and capital gains that you earned during the year. Another way is to use the 1099-DIV form, which lists all of the dividends and capital gains that you received during the year.

Once you have calculated your investment income, you can use the following table to find out what tax rate you will owe:

| Tax Rate | Income Range |
|---|---|
| 0% | Up to $40,125 |
| 10% | $40,126 to $85,525 |
| 12% | $85,526 to $163,300 |
| 22% | $163,301 to $207,350 |
| 24% | $207,351 to $257,500 |
| 32% | $257,501 to $341,500 |
| 35% | $341,501 to $445,850 |
| 37% | $445,851 or more |

It is important to note that these are just the federal income tax rates. You may also owe state income tax on your investment income.

If you have any questions about how to calculate your investment income or what tax rate you will owe, you should consult with a tax professional.

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