Taxes Paid on Savings Account

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bullsdoc
Posts: 3
Joined: Thu Sep 13, 2018 7:33 pm

Taxes Paid on Savings Account

Post by bullsdoc » Thu Sep 13, 2018 7:35 pm

Hey all,

Hoping to get some clarification on what taxes must be paid on investment income from a savings account interest. Is this subject to federal, state, and local income taxes if your area has them? Is it subject to FICA? Thank you for the help

Gill
Posts: 4570
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Taxes Paid on Savings Account

Post by Gill » Thu Sep 13, 2018 7:54 pm

Subject to all except FICA.
Gill

RudyS
Posts: 1257
Joined: Tue Oct 27, 2015 10:11 am

Re: Taxes Paid on Savings Account

Post by RudyS » Thu Sep 13, 2018 8:44 pm

Gill wrote:
Thu Sep 13, 2018 7:54 pm
Subject to all except FICA.
Gill
Gill, I can't believe that I have found something in your post that might not be correct. City income tax may or may not include investment income, depending on local laws. As an example, for Saginaw, MI, such interest is not taxed:

"Another major difference between local income taxes and federal or state taxes is that most local taxes are collected only on earned income, and not on capital gains or other non-earned income like interest and dividends."

My source: http://www.tax-rates.org/michigan/saginaw-income-tax

bullsdoc
Posts: 3
Joined: Thu Sep 13, 2018 7:33 pm

Re: Taxes Paid on Savings Account

Post by bullsdoc » Sat Sep 15, 2018 9:46 pm

Thanks so much. Any idea on a good place to find this information? I can't seem to find if I need to pay local taxes on interest from a savings account or capital gains in my area.

Additional quick question if possible: Assuming the above is taxed locally, are muni bonds within the state exempt from local taxes as well as state/federal taxes? Thanks again for any help here.

spectec
Posts: 1181
Joined: Mon Jul 14, 2014 8:00 am

Re: Taxes Paid on Savings Account

Post by spectec » Sat Sep 15, 2018 9:52 pm

You'd get a better answer if you said what city & state you live in.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

UpperNwGuy
Posts: 824
Joined: Sun Oct 08, 2017 7:16 pm
Location: Washington DC

Re: Taxes Paid on Savings Account

Post by UpperNwGuy » Sat Sep 15, 2018 10:06 pm

Call your city tax office and ask them directly. You’ll get a better answer than you’ll get from us.

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FiveK
Posts: 5363
Joined: Sun Mar 16, 2014 2:43 pm

Re: Taxes Paid on Savings Account

Post by FiveK » Sat Sep 15, 2018 10:15 pm

bullsdoc wrote:
Sat Sep 15, 2018 9:46 pm
Thanks so much. Any idea on a good place to find this information?
Your city tax form. If one does not exist, you aren't taxed by the city.

Gill
Posts: 4570
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Taxes Paid on Savings Account

Post by Gill » Sun Sep 16, 2018 7:33 am

RudyS wrote:
Thu Sep 13, 2018 8:44 pm
Gill wrote:
Thu Sep 13, 2018 7:54 pm
Subject to all except FICA.
Gill
Gill, I can't believe that I have found something in your post that might not be correct. City income tax may or may not include investment income, depending on local laws. As an example, for Saginaw, MI, such interest is not taxed:

"Another major difference between local income taxes and federal or state taxes is that most local taxes are collected only on earned income, and not on capital gains or other non-earned income like interest and dividends."

My source: http://www.tax-rates.org/michigan/saginaw-income-tax
Thanks, Rudy. You’re right. My oversight. Mea culpa!
Gill

RudyS
Posts: 1257
Joined: Tue Oct 27, 2015 10:11 am

Re: Taxes Paid on Savings Account

Post by RudyS » Sun Sep 16, 2018 9:28 am

Gill wrote:
Sun Sep 16, 2018 7:33 am
RudyS wrote:
Thu Sep 13, 2018 8:44 pm
Gill wrote:
Thu Sep 13, 2018 7:54 pm
Subject to all except FICA.
Gill
Gill, I can't believe that I have found something in your post that might not be correct. City income tax may or may not include investment income, depending on local laws. As an example, for Saginaw, MI, such interest is not taxed:

"Another major difference between local income taxes and federal or state taxes is that most local taxes are collected only on earned income, and not on capital gains or other non-earned income like interest and dividends."

My source: http://www.tax-rates.org/michigan/saginaw-income-tax
Thanks, Rudy. You’re right. My oversight. Mea culpa!
Gill
Thanks, Gill. The only reason I was aware of this is through my work as a Taxaide counselor. Just one of the "pay-offs" of volunteering.

trueblueky
Posts: 1327
Joined: Tue May 27, 2014 3:50 pm

Re: Taxes Paid on Savings Account

Post by trueblueky » Sun Sep 16, 2018 2:53 pm

We need to know the state.

Some states allow a local tax on earned income -- PA and KY come to mind. This allows the city to raise funds from commuters who use the city's streets, fire, police, etc., but who live in the suburbs.

Some states have a local tax that is figured as a line on the state tax form -- IA and MD come to mind. For those, anything taxable to the state is taxable to the locality.

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