Hi there!
This is my first year trying to do tax optimization/tax planning and I'm aiming for the saver's tax credit. Below is the breakdown of my tax situation (with # corresponding to the 1040). I'm trying not to exceed an AGI of $18,500 as that's the number I need to earn the total $1,000 saver's credit.
Gross Income: $48,176.00
401k: -$18,000.00
HSA: -$2,700.00
457: -$3,600.00
MAGI (7): $23,876.00
IRA Deduction: -$5,500.00
AGI (38): $18,376.00
Standard Deduction (40): -$6,350.00
Exemptions (42): -$4,050.00
Taxable Income (43): $7,976.00
Tax (44): $798.00
Saver's Credit (Form 8880): -$1,000.00
Total Tax (63): $0.00
My question: This is the first year I've saved money in a taxable investment account with Vanguard (VTSMX). I realize I haven't factored in this money anywhere(!) and I want to do so while I still have time to move more money into my tax deferred 457 account. Can someone describe to me how earnings in a taxable account are taxed? Dividends/interest/capital gains. Will all the earnings I've made need to be added into my gross income number above? It's all still very fuzzy to me.
Note: I reinvest dividends and haven't sold any shares/am not planning to anytime soon.
Thanks in advance for any tips! And please feel free to tell me what else I might be missing.