Optimize Your Asset Allocation

Summary of tax rates for year 2013.

Capital Gains Tax Rate For Year 2013

Short Term Capital Gains & Ordinary IncomeSingle FilingJoint Filing2013 Tax Rate
Up to $8,925Up to $17,85010%
$8,926 - $36, 250$17,851 - $72,50015%
$36,251 - $87,850$72,501 - $146,40025%
$87, 851 - $183,250$146,401 - $223,05028%
$183,251 - $398, 350$223,051 - $398,35033%
$398,351 - $400,000$398,351 - $450,00035%
$400,001 and over$450,001 and over39.6%
Long Term Capital GainsSingle FilingJoint Filing2013 Tax Rate
Up to $36,250Up to $72,5000%
$36,251 - $400,000$72,501 - $450,00015%
$400,001 and over$450,001 and over20%
*High income earners will be charged an additional 3.8% Medicare Contribution Surtax on capital gains and dividends

14 thoughts on “Optimize Your Asset Allocation

  1. My understanding of the Romney IRA situation is that it was indeed related to his work at Bain Capital. However it wasn’t just buying shares straight-up. Rather, employees were allowed to purchase special shares that acted somewhat similar to options – cheap up front, very valuable if the underlying company does well, worthless if the underlying company does poorly.

    • Thanks for the snippet Steve! What you say makes a lot of sense. To accumulate so much so quickly would require MR to do something like this. He probably hedged his bets by buying into the IRA a little bit of number of companies Bain incubated.

      He had some good accountants by his side! :)

  2. Nice post, MC! I agree with Steve. This is why it is good to invest a growth company in IRA even if it doesn’t pay dividend.

  3. This is really helpful for people who are unsure of what type of account they should put their investments in. I’m a believer in the ROTH IRA because of the tax advantages it offers. Although in reality I may never be at a point where I can invest more than the $5500 annually you can put in a Roth IRA. If I do, I’m saving this post for that time.

  4. Hi Moneycone! Great to hear from you. :) This is a really helpful article. I didn’t realize there were this many different tax rules around capital gains. I guess I shouldn’t be surprised though with as complicated a tax code as we have in the US. Good to know about dividend paying vs non paying stocks. That’s probably what I encounter the most on this list.

  5. This is really important information. Saving on taxes by appropriately locating assets can save you a log of money. I’m going to include this one in a future round up!

  6. It’s so important to diversify. Good post.

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