Whatever gains you pull out will be taxed as income if you held the stocks for less than a year. This is only money you made in the market, not your initial investment. It will b subject to the same income tax brackets for you paycheck. It will essentially add to your taxable income.
If you held the stocks for more than a year, then the tax rate is a flat 20% for all your earnings.
So save some aside for the tax bill upcoming.
Also as we are approaching the end of the year, it may be relevant for you to realize that your withdraw(on short term gains) will tax earnings onto your 2023 income and you wont owe the bill until April 2024. So keep that money around to pay the tax until then..
jtothewtothes t1_j2bou5r wrote
Reply to comment by Escape2Freedom in Penalties For Withdrawing from My Vanguard Index Fund Early?? by Escape2Freedom
Whatever gains you pull out will be taxed as income if you held the stocks for less than a year. This is only money you made in the market, not your initial investment. It will b subject to the same income tax brackets for you paycheck. It will essentially add to your taxable income.
If you held the stocks for more than a year, then the tax rate is a flat 20% for all your earnings.
So save some aside for the tax bill upcoming.
Also as we are approaching the end of the year, it may be relevant for you to realize that your withdraw(on short term gains) will tax earnings onto your 2023 income and you wont owe the bill until April 2024. So keep that money around to pay the tax until then..