Interest Income & Ordinary Dividends are taxed at ordinary income rates
Qualified Dividends are taxable:
- 0% on any amount that otherwise would be taxed at a 10% or 15% rate,
- 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 37%
- 20% on any amount that otherwise would be taxed at a 37% rate.
Net Investment Income Tax is 3.8% tax on interest, dividends, capital gains, rental and royalty income. Tax applies on earnings that exceed bellow threshold rates:
Married filing jointly — $250,000,
Married filing separately — $125,000,
Single or head of household — $200,000, or
Qualifying widow(er) with a child — $250,000.