this post was submitted on 15 Apr 2024
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Most people aren't going to have anywhere near enough taxable investment income for that to matter.
I think I got about $.87 in interest payments from bank accounts in the past year. I don't think that's going to make a huge difference in taxable income.
You need a better bank account then.
Let's say you have $10k in cash (typical emergency fund) and get 4% on it (relatively competitiv; e.g. Ally gives 4.25%), that's $400 in interest (not including compounding), which is a reportable amount of income. If you're doing something clever or have a bit more cash for some reason (e.g. saving for a house), you could easily get into more interesting amounts of money.
There's your mistake right there, thinking people have even $10k to serve as a spare emergency fund.
I don't even have a thousand spare right now for an emergency.
I had like $6k savings until I did my taxes and apparently everything I saved up was how much I owed the tax man. I thought I had actually gotten ahead but turns out that was an illusion lol