*MSTY $200,000 Income Tax Example* How Much Tax YOU WILL PAY On Yieldmax Option Income ETF's

[@DefinitelyAi-bot]

Don’t forget you are only taxed on 1/2 of your dividends income on MSTY, the other half is considered return on capital (ROC). So you only need to calculate taxable income on $89,000 instead of the full $178,000. Until the ROC equals what you have invested.

[@HonorableInvesting]

Ahhh interesting, that’s another thing working for you, thanks for the heads up!

[@DefinitelyAi-bot]

@ every dividend ETF is different on their ROC tax. But pretty sure MSTY is 50%.

[@alcarlay]

are you sure about this?? never heard of this before.. wow! if this is true then i will have so much money left over for my new rolex!!

[@gonuclearnavy]

Actually Return of Capital is never taxed (US), even after you get more back than you've paid in. What it does do is lower your cost basis for your held shares by that amount. So when you DO sell your MSTY, you will be taxed on an adjusted tax basis for the appreciation of your shares. If you haven't held at least 365 days, you'll pay short term capital gains on that. Be aware.

[@gonuclearnavy]

It's also important to note that in the US, if you make more than $1700 in dividends, the IRS requires you to pay quarterly estimated taxes. If you don't they'll tack on penalties and fees for the time you didn't pay. They keep track! It'll show you your RoC and DIV amount on your 1099-DIV form, issued once a year.

[@oman4229]

Thank you very much for this video! Nobody ever talks about the taxes. Definitely subscribed!!!!

[@ProjectPremiumHarvest]

Thanks for the video! learned about Canadian taxes even though it doesnt apply to me haha. Keep up the good work!

[@HonorableInvesting]

Haha no worries Mr premium, and thank u!

[@gitarzzan1]

What about Return of capital? Around half of Misty has been return of capital which would be taxed at 0 In the U.S.

[@glennmcmullen3573]

Yes, ROC is important!

[@HonorableInvesting]

Very true, this is a great point I’ve heard a few times, anything that’s return of capital is taxed at 0!

[@rcdyer]

@@HonorableInvesting I would imagine our 1099's will reflect the exempt amounts accordingly.

[@LucasVanDuyn]

Up to a certain amount of losses one might have can reduce the tax obligations as well.

[@HonorableInvesting]

Yeah thats a good point Lucas, The return of capital is a big one that normally comes up

[@LucasVanDuyn]

@ remember though if 200k gives you 45k in income and you take a standard deduction from that, it could throw a person into a low bracket to no taxes at all given a person’s finances. On the other hand a 200k account with incomes at say 65 with a standard deduction could leave a person in the spot to pay higher taxes on the income.

[@franciscoordaz568]

Great video 👍

[@DhirajDedhia-z8v]

Great video. I'll love to see ways to save taxes

[@NgaNguyen-k2d4m]

Thank you for explaining step-by step. The tax bracket trying you crazy. If you wanted more dividend plus your income , you must separate the money to save to pay tax, it's fair. Do you know how to set up in the broker account to save money to pay tax rate later?

[@HonorableInvesting]

Ya no worries Nguyen. Hmmm I don’t, that’s something I could look into. Mabye for that you just keep your % in cash but the way I would do it is reinvest then have some cash at the end to pay it back, or use your last dividends to pay for taxes

[@NgaNguyen-k2d4m]

Thank you for you advice . I am new invested.

[@markr044]

Although Canada taxes don't apply to me, the same principles apply to US taxes, at different brackets. A good demonstration of how taxes on current investments work. I ask my friends, "would you rather keep 100% on a 4% profit (such as CDs or money market) or keep 70% on an 80%+ profit?" To me, it's a stupid question, but I hear a lot of stupid answers.

[@HonorableInvesting]

Ya exactly. Yeah I think it also depends on a persons knowledge and experience, some people just want a safe return and could just be they don’t know about anything else

[@stacy9497]

Are the dividends considered qualified dividends? If so, they are taxed as long term capital gains in the U.S.

[@devron86]

Definitely need to factor in the return of capital. The Yieldmax funds have a very high percentage of ROC, which means significantly less tax.

[@Misterbsnshee]

If you lived In Florida would it lower tax ? I think Florida has no income tax

[@Tayaridior]

Do I still get taxed if I do this in my Roth?

[@patrickalexis6230]

No. Roth IRAs are 100% tax free growth and withdrawals.

[@apetri7221]

Not sure when anyone is going to address this...but they are not DIVIDENDS...these are premiums that are produced by doing covered calls...so in effect they are Distributions of Cap Gains and ROC...they are not dividends...Dividends are taxed already then distributed, and that is why in Canada we have what is called a Dividend Tax Credit! Preferential treatment ...

[@rcdyer]

I have about half that in MSTY and NVDY and ZERO is taxed because it is all in a ROTH

[@darthbrooks4933]

Killin it brother

[@RicardoHernandez-zr1pw]

Yes but can you go and use that money to buy things right now without getting taxed?

[@darthbrooks4933]

@@RicardoHernandez-zr1pw no, that’s why it’s in a tax haven ROTH account….you new here?

[@RicardoHernandez-zr1pw]

@@darthbrooks4933 Yes

[@rcdyer]

@@RicardoHernandez-zr1pw That's what Schwab told me. Anything you get from a ROTH is not taxable

[@fanxia3100]

If you have a job you need to add that into the equation. Tax are no fun when you have to pay them.

[@ruffmats376]

Not exactly how it works. You are not taking ROC into consideration. 👍🏼

[@johnreynolds9756]

thats why i have a roth ira

[@HonorableInvesting]

Absolutely, if you can max the tax advantage accounts and go from there, it helps your taxes all the way around

[@RicardoHernandez-zr1pw]

Can you buy stuff directly from the Roth using your investments at anytime without issues?

[@HIGHYIELDDIBIDENDWARRIOR]

Khmer says don't worry about tax and Khmer is our king like trump so I listen to him and he has cash flooooo and is getting witch!