How to Grow Passive Income & Pay Little-to-No Tax Forever
What is Passive Income?
Passive income is money earned as a result of little effort and you can make money while you sleep, go on vacation, fall ill, or any other circumstance which would bar you from actively earning income.
In a word: yes. As with active (earned) income, passive income usually qualifies as taxable. However, passive income can receive different treatment from the IRS, as discussed more below.
Is Passive Income Taxable?
Purchase a dividend-paying stock through a free stock trading platform like Webull and hold on while the payments hit your brokerage account. And if you see the upper end of the 0% tax range shown above, you’ll see just how to pay zero tax on your income: make it passive!
How to Pay Less Under Passive Income Tax Rates (LT Capital Gains)
Passive income does not include salary, portfolio, or most forms of investment income. In general, the IRS considers an activity passive if it involves rentals or any business in which the taxpayer does not materially participate.
What is a Passive Activity?
Well, if you feel conviction in pursuing a strategy of paying Uncle Sam less on your tax-advantaged passive income, the next step is identifying the assets which will produce the best return on your investment. In addition to Fundrise, the best retail brokerage I’ve found for individual stock trading is Webull.
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