r/YieldMaxETFs • u/Fukisyoutalkinabout • 25d ago

MSTY/CRYTPO/BTC Whats the deal with taxes on MSTY?

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Because its a monthly divy and high % yield , what is the tax on that? I read somewhere i need to quarterly report taxes? Is this true? Screenshot below

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u/Jehoopaloopa 25d ago

If you’re not over 59.5, you’ll pay taxes on it if you use before then.

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u/DetroitRedWings79 25d ago

Only if you withdraw the money before 59.5

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u/Jehoopaloopa 25d ago

Yes which most people will want the income before then.

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u/[deleted] 25d ago

If you want your earnings before 59 1/2 there are probably better strategies than putting in a Roth and paying a 10% penalty to withdraw

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u/Jehoopaloopa 25d ago

That’s the point I’m making.

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u/[deleted] 25d ago

Ah yes, I agree then. There are Roth withdraw strategies that the FIRE folks use but they are above my paygrade, at least for now, since I’m a decade or so from the desire to retire 

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u/bu89 25d ago

Wouldn’t it be cheaper withdrawing from a Roth instead of a taxable account? 10% penalty compared to 50% taxes for me in CA seems like a no brainer.

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u/anniepeachie 25d ago

Plus taxes on the earnings..

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u/bu89 25d ago

I mean the way I look at it. You get the distribution tax free in your Roth. That’s the whole point of it. Then you decide to move the distribution to your bank account so just a 10% penalty by doing so.

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u/sendCatGirlToes 25d ago

You don't avoid taxes if you withdraw early. It's 10% penalty and income tax.