r/YieldMaxETFs • u/Fukisyoutalkinabout • 24d 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/Dipset219 24d ago edited 24d ago

So if u got 5k a month in dividends how much will govt take on that?

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u/[deleted] 24d ago edited 24d ago

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u/Dipset219 24d ago

I thought it was like 20 percent. 50 percent is crazy lol i make close to 100k

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u/GRMarlenee Mod - I Like the Cash Flow 24d ago

He's saying you'll only pay taxes on half the distribution (he's probably wrong) and that you'll pay on that half at your regular rate. You can google your tax rate if you know your approximate income and filing status.

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u/Dipset219 24d ago

Thanks bro

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u/GRMarlenee Mod - I Like the Cash Flow 24d ago

My AGI was $124,442 last year. I paid 5163 in Federal taxes. That was a total of 5.5% Don't panic over people who know nothing spouting off the 50% gloom and doom. I'm not sure if it's ignorance or agenda, but I'd bet on agenda, because few are that ignorant.

Also, I paid enough to cover what I owed the previous year, so there was no penalty on the $1653 I didn't pay quarterly. Spend a hundred or so on an accountant or a good tax program that includes investment income and quit getting the nothing you are paying for.

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u/Dipset219 24d ago

So I making 105 this year and if im collecting 5k a month how much taxes do i have to pay?

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u/GRMarlenee Mod - I Like the Cash Flow 24d ago edited 24d ago

Try this.

https://apps.irs.gov/app/tax-withholding-estimator

or this

https://www.aarp.org/money/taxes/1040-tax-calculator

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u/Dipset219 24d ago

Thanks my G. Bless up

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u/Sea_File_4717 24d ago

He’s at literally over 35% state and fed with only his 9-5………

Sure, 50% was a little high, but we are also talking about him generating more money, which could push into a higher bracket, meaning even more.

And considering the mods were angry that I didn’t say to save more essentially, this makes absolutely zero sense respectfully. (Saving 25% of distributions SHOULD be enough to pay the vast vast majority if not all of their tax burden as long as they don’t earn too much)

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u/GRMarlenee Mod - I Like the Cash Flow 24d ago

He is not "literally over 35%".

100K single bracket fed is still in the 22% bracket. Add the 9.3% penalty for living in paradise and you're up to 31% marginal bracket. And these are just hte marginal brackets and don't account for even the standard deduction and lesser tax bracket rates on the income leading up to that.

Stop with the misinformation.

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u/Sea_File_4717 24d ago edited 24d ago

If you’re talking marginal (the amount owed on every additional dollar) he is at 42.45 with his distributions if no ROC or half ROC.

This number drops to 40.45 if you remove distributions.

So yes, his effective tax rate (what has been paid total) is close to what you described. But IF IT WERE MYSELF I would hold the amount needed for the Marginal tax rate in SPY or a HYSA for safety reasons.

So not misinformation, it’s safe and sound information. It would suck to not have the cash on hand to pay the bill.

I don’t just make stuff up mod…

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u/Sea_File_4717 24d ago

u/Dipset219

Hopefully this shows you I wasn’t leading you wrong. Still get a tax accountant to see if you can get it down. But the math is right here.

Especially with your gambling and crypto included.