economy
January 27, 2026
Your income-generating investments could create a tax bill. How to prepare for the season
The tax-filing season officially kicked off on Monday. Investors should watch their mailboxes for key documents they'll need to complete their returns.
TL;DR
- The IRS began accepting individual income tax returns on Monday, with a filing deadline of April 15.
- Investors are advised to wait for all tax documents before filing, especially those holding income-generating assets.
- Capital gains taxes apply to assets sold for a profit, with rates depending on the holding period.
- Dividend-paying stocks and exchange-traded funds generate taxable income, even if reinvested.
- Interest from bonds, bond funds, money market funds, and savings accounts is taxed as ordinary income.
- Master limited partnerships (MLPs) issue Schedule K-1 forms, which can arrive late and are more complex to report.
- Simplifying the tax process may involve trading less actively or holding certain income-producing assets in tax-advantaged accounts.
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