Ask a Fool: How Could the Tax Reform Bill Affect Investment Income?

Ask a Fool: How Could the Tax Reform Bill Affect Investment Income?

First, let's talk about what won't change if this legislation passes.

The bill makes no changes to long-term capital gains tax rates, which also apply to qualified dividends. These rates are currently 0% for taxpayers in the two lowest tax brackets, 15% for the next four brackets, and 20% for taxpayers in the highest tax bracket. This proposal keeps the same income thresholds in place that apply to these rates now.

In addition, since the additional 3.8% net investment income tax on high earners is part of the Affordable Care Act, it isn't going anywhere.

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Source: Fool.com